The Japanese economy faced a difficult time in fiscal 2011
following the devastating earthquake and tsunami. To add to this
were several explosions that occurred in the Fukushima nuclear
Following the Fukushima disaster, the nuclear industry nearly
collapsed and badly impacted the uranium sector (
Uranium ETF Meltdown: Can Nuclear Power Bounce
Demand for uranium decreased soon after the catastrophe as
many nuclear plants were shutdown and more projects were delayed.
With supply outstripping demand, the price of uranium fell
drastically. Subsequent to a slump in the uranium sector,
tracking the sector were beaten down to more than half of its
trading prices pre-disaster.
The funds experienced a massive fall in their asset bases as
well, volume and price as investors shied away from investing in
uranium. Global X Uranium ETF (URA) plunged nearly 60% by Jun
2011 to almost $7. Market Vectors Uranium + Nuclear Energy ETF
(NLR) showed a similar downward trend in its performance during
Although the sector struggled to show some strength in the
past year the efforts were far from enough to bring about a
Can the Uranium ETF Hold On To Recent Gains?
But it seems that Japan's national election has finally turned
the fate of the sector. Since the new government under Prime
Minister Shinzo Abe came into power after the mid-December
elections, it appears that the worst may be over for the sector (
Play a Resurgent Japan with These Three ETFs
Uranium funds have seemingly bottomed out and are all set to
pull back as Abe may give his consent to start some of the
nuclear reactors in the latter half of this year.
Another factor which would boost the price of the commodity is
the plan of China, India and Russia to set up 130 nuclear
reactors. China plans to have its nuclear power capacity reach 40
million kilowatts by 2015 from 12.54 million kilowatts at the end
of 2011. Other nations like France, Romania, South Korea,
Bangladesh, Turkey and the UAE are also focusing on the
development of the industry.
Also, the need for new energy sources has resulted in rising
demand for uranium. For many countries, nuclear energy plays a
very important role in order to avoid the negative effects of
using coal (
3 Energy ETFs for America's Production Boom
The attempt to reduce dependence on greenhouse gases makes
nuclear energy an important source. With the significant rise of
nuclear energy in developed emerging markets, one way to play the
trend would be by way of investment in uranium.
Investing in uranium represents a rewarding prospect for
investors. Investors looking to capitalize on the next upswing in
the commodity in a basket form have a few options available:
Global X Uranium ETF (
URA offers a pure play in uranium with more focus on uranium
producers and less on nuclear energy producers. So URA represents
an interesting pick for investors in this environment of rising
uranium prices (
Could This Be the Year for These Mining ETFs?
The fund manages an asset base of $144.2 million which it
invests in a basket of 20 securities. Cameco Corporation, Paladin
Energy Limited and Uranium One Inc form the top line of the
For a pure play in uranium, Cameco Corporation represents a
compelling opportunity as it is one of the biggest uranium
producers and accounts for 16% of the world's uranium
It plays a very dominant role in the performance of the fund,
accounting for 18.5% of the fund's allocation. Cameco is a
profitable uranium miner and is blessed with high quality assets
providing a lucrative way to have direct exposure to the
The fund had delivered a return of negative 19.5% over a
period of one year. However, the return in the past month is
evident of the trend reversal in the industry. The fund gained
9.13% in the past one month while charging a fee of 69 basis
Market Vectors Uranium + Nuclear Energy ETF (
URA has an edge on NLR in terms of exposure when it comes to
uranium investing. NLR is more inclined towards nuclear energy
companies and less on uranium producers.
NLR also provides exposure to 20 companies and manages an
asset base of $81.4 million. Cameco Corp occupies the second
position in the fund while Mitsubishi Heavy and Edf FP hold the
first and third spots. The fund charges a fee of 60 basis points
on an annual basis.
The fund delivered a negative return of 3.53% over a
period of one year. However, the recent performance of the fund
ensures a rebound in the sector. The fund delivered a return of
5.81% in the last one month.
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CAMECO CORP (CCJ): Free Stock Analysis Report
MKT VEC-NUCLEAR (NLR): ETF Research Reports
GLBL-X URANIUM (URA): ETF Research Reports
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