ETF Ideas for an Anticipated Shift to Nuclear Power

The issue of nuclear power is taking center stage at climate talks in Copenhagen next month, and many companies are gearing up to prove their advancements with nuclear power. Related ETFS are set to rally.

Energy demand around the world is rising, making it an ideal time to address where nuclear power fits into the equation. There are about 70 new plants under construction globally, and there could be more as the world searches for a clean-energy solution.

Hannah Fairfield and Karl Russell for The New York Times report that many companies are concerned that the credit crisis has dealt a critical blow to nuclear power in the United States, which had been perceived as undergoing a renaissance since 2004.

There are about 26 plants under construction in the United States right now, but most of the action is coming from overseas. Companies that design reactors, such as General Electric (NYSE: GE), are experiencing rapid growth as Emerging Asia and Europe seek out their business.

• PowerShares Global Nuclear (NYSEArca: PKN): up 21.3% year-to-date

• Market Vectors Nuclear Energy (NYSEArca: NLR): up 15.8% year-to-date

• iShares S&P Global Nuclear Energy (NYSEArca: NUCL): up 28.3% year-to-date

Comments

[Mad Hedge F...:]

cer If we are just on the verge of entering a long term bull market for nuclear energy (click here for full report ), then you have to expect the same for nuclear fuel. Last year, the US consumed 55 million pounds of “yellow cake” or uranium oxide (U3O8), but produced only 4 million pounds. The rest came out of stockpiles or from imports, much if it from the reprocessed Russian nuclear warheads. The new Department of Energy, under Dr. Stephen Chu, has made a big priority of making loan guarantees available to expand nuclear capacity from a lowly 20% of our total grid. The price of uranium is also rising, dragged up by crude, at one point popping 40% this year. The futures may be the better way to play this, as Uranium mining stocks are notoriously subject to manipulation, and are at the moment a tad expensive. In 2007, NYMEX started trading in uranium futures where one contract for 250 pounds is now worth 11,250. Good luck taking delivery is you aren’t running a nuclear power plant. You could be getting a midnight knock on your door from Robert Mueller.

Nov 05 09:34 AM