Global X Uranium ETF (NYSEARCA:URA) began trading November 5, 2010 as the first ETF to track companies involved in uranium mining. According to the press release (pdf), uranium “is a clean resource alternative for electric generation. One pound of uranium can generate as much energy as 20,000 pounds of coal, and leaves behind a fraction of the carbon footprint. Almost all the uranium mined today is used to produce electricity, and that provides about 16% of the world’s electricity.”
The global uranium mining industry is dominated by just three companies. To provide diversification, the underlying Solactive Global Uranium Total Return Index from Structured Solutions AG weights each component proportionally according to its free-float market capitalization and value traded (dollar volume) with both criteria equally weighted. The multi-tier methodology caps all components with a weight of more than 8% at a maximum of 20% each and a combined weighting cap of 45%.
The three stocks in the first tier are Cameco (NYSE:CCJ) 18.1%, Uranium One Inc (OTC:SXRZF) 13.4%, and Paladin Energy Ltd (OTCPK:PALAF) 11.9%. The next tier caps companies at 4.75% and currently includes six stocks: Usec Inc (USU), Energy Resources of Australia (OTCPK:EGRAF), Extract Resources Ltd (OTC:EXRLF), Denison Mines Corp (NYSEMKT:DNN), Kalahari Minerals PLC (OTC:KMPLF), and Uranium Energy Corp (NYSEMKT:UEC). Many of the US pink sheet ticker symbols above have low liquidity. Stock traders should consider using the company’s primary foreign market listing (complete list of 23 holdings).
While URA is globally defined, country weightings currently include only English-speaking countries: Canada 50.4%, Australia 31.4%, United States 13.4%, and United Kingdom 4.8%. URA has an expense ratio of 0.69% and additional information is located in the fund summary and fact sheet (pdf).
Three other ETFs that focus on nuclear energy but are not limited to uranium mining and are not direct competition for URA. These include utilities, plant construction, and other related industries: Market Vectors Nuclear ETF (NYSEARCA:NLR), PowerShares Global Nuclear Energy (NYSEARCA:PKN), and iShares S&P Global Nuclear Energy (NASDAQ:NUCL).
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.