The Global X Uranium ETF (URA) gives investors exposure to a wide range of companies involved in uranium mining and nuclear component production, including those involved in extraction, processing, exploration, or the manufacturing of uranium and nuclear equipment.
How do I go about investing in uranium?
Nuclear power is a safe, efficient, and necessary source of energy to fulfill the world’s increasing energy demands. Nuclear power can provide electricity on a larger scale while emitting fewer greenhouse gases. This enables countries to expand their electrical system and usage while reducing pollution levels. Nuclear power generated around 10% of the world’s electricity in 2019, according to the International Atomic Energy Agency (IAEA). One-third of the world’s low-carbon electricity comes from this source. Since the end of 2018, net installed capacity has increased by 2.5 GW(e), and it is expected to expand by 25% above current levels to 496 GW(e) by 2030, and by 80% to 715 GW(e) by 2050. The status of nuclear power generation is depicted in the infographic below. 1
Nuclear power facilities use uranium fuel to generate energy. A ton of coal, three barrels of oil, or 17,000 cubic feet of natural gas are all contained in a single uranium pellet, which is barely larger than a pencil eraser. 2 Global nuclear power generation drives much of the commodity’s demand. Despite anticipated increases in nuclear power and uranium consumption, obtaining exposure to this commodity might be challenging. Uranium is traded on futures exchanges with limited liquidity, and its use in weapons manufacture is subject to ownership limitations.
The following analysis attempts to answer six key questions about uranium:
What are the benefits of uranium and how is it used to create electricity?
Are uranium ETFs available?
The largest uranium-focused ETF on the market is the Global X Uranium ETF (URA, $26.34). True, it has just under $890 million in assets under management (AUM), but that’s a growth of 365 percent from the $243 million it claimed at the start of 2021.
With a portfolio of 45 equities encompassing miners, refiners, and equipment manufacturers for both uranium and nuclear-facility companies, URA provides full exposure to the specialty uranium industry.
Concentration risk is a common concern in smaller industry and thematic funds, and URA is no exception. Cameco (CCJ), for example, accounts for about a fifth of the assets in the uranium ETF. The top five holdings account for more over half of URA’s weight, including Kazakhstan’s Kazatomprom (8.7%), the world’s largest uranium producer.
It’s also worth noting that the assets of the Global X Uranium ETF are almost entirely international. Canada has half of the net assets, followed by Australia (11%), and Kazakhstan (1%). (9 percent ). The United States is only slightly more than 5% of the total.
Is URA ETF a Good Investment?
The positive outlook is reflected in URA’s POWR Ratings. In our proprietary grading system, the ETF gets an overall A grade, which translates to Strong Buy. For Trade and Buy & Hold, URA receives an A. URA is ranked #15 out of 114 ETFs in the A-rated Commodities ETF group.
Uranium stocks offer long-term promiseĀhere’s how to pick the best ones
Uranium stocks are investments in firms that seek out, extract, and process the element uranium.
The long-term forecast for uranium is encouraging, although supply continues to outnumber demand. Prices have remained low as a result, despite Cameco, the industry’s largest publicly traded miner, taking steps to counteract chronically low uranium prices. For example, it has previously halted manufacturing to avoid an oversupply.
This type of pause has aided in the stabilization of uranium prices. Low oil costs during the first few months of the pandemic, on the other hand, have kept uranium prices low in the short term, slowing the construction of new reactors. Here are the greatest techniques to reduce your risk while investing in uranium equities.
What is the best way to trade uranium stocks?
To find publicly listed uranium ore mining businesses, use your online trading account or a free online stock screener. You can invest in firms that primarily mine uranium, such as Mega Uranium Ltd. and Cameco Corporation, or in companies that mine uranium alongside other metals, such as BHP Billiton Limited. Small-cap uranium ore mining firms might be worth looking into.
Is it possible to buy uranium futures?
Uranium futures are traded on the New York Mercantile Exchange (NYMEX). Uranium futures prices are expressed in dollars and cents per pound and are traded in 250-pound lots on the New York Mercantile Exchange.
Why are uranium stocks expected to rise?
Upward uranium prices, substantial news from the nuclear energy business, which forms the backbone for uranium companies, a mega-growth move by Uranium Energy, and an analyst upgrade all drove the stock higher.
What does a kilogram of uranium cost?
US $130/kg U category, and others that may cost more than US $130/kg due to deep depth or remote location. In addition, very substantial amounts of uranium are reported to be spread in numerous places at very low grade.
Is it wise to invest in Cameco?
Cameco is well positioned to benefit from strengthening uranium market fundamentals, which are expected to last for the rest of the decade. It has sufficient viable reserves, a successful business strategy, and a stable financial position to let it weather the uranium industry’s volatility.