China Gives Power to Uranium and Nuclear ETFs

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Includes: NLR, NUCL, PKN, URA
by: Tom Lydon

Uranium ETFs could be on the brink of an explosion if China has any say in the matter.

The country’s nuclear power agency recently estimated that China could build 112 gigawatts of nuclear capacity by 2020. The amount is one-third of the world’s current nuclear capacity, so it’s no small amount. The announcement had uranium investors salivating as the prices spiked higher, says Edward Welsch for The Wall Street Journal.

That China is stepping up its nuclear capacity is only one bullish signal for uranium these days. Global warming concerns have renewed interest in nuclear energy around the world. Russia, South Korea and Pakistan are among the nations developing reactors and gearing up to stockpile whatever inventory they can get.

The Global X Uranium ETF (NYSEArca: URA) is a pure play on uranium that owns uranium mining companies and firms that manufacture mining equipment. Exposure to nuclear energy can also be had through Market Vectors Nuclear Energy (NYSEArca: NLR), iShares S&P Global Nuclear Energy (NYSEArca: NUCL) or PowerShares Global Nuclear Portfolio (NYSEArca: PKN). NLR has the largest exposure to the United States, with 32% of the weight; NUCL has 22.4%; and PKN has just 3%.

Tisha Guerrero contributed to this article.

Disclosure: None