Nuclear energy is touted as one of the cleaner energy solutions to meet the world’s decarbonization goals. Nuclear energy can be produced by two processes: splitting nuclei (fission) or fusing them together (fusion). Uranium is an important element of nuclear energy, as it is the main fuel used for nuclear reactors. As investors cannot invest directly in nuclear or uranium projects, they could gain exposure to these elements through ETFs.
Range Nuclear Renaissance Index ETF (NUKZ), Themes Uranium & Nuclear ETF (URAN), and Sprott Junior Uranium Miners ETF (URNJ) are three nuclear energy and uranium miner ETFs that have shown promising future potential. Let’s look at the three ETFs in detail.
Range Nuclear Renaissance Index ETF (NUKZ)
The Range Nuclear Renaissance Index ETF invests in equity securities of companies engaged in nuclear energy. This includes companies working on advanced reactors, utilities, construction and services, and nuclear fuel. NUKZ was founded on January 23, 2024, and its current assets under management (AUM) stand at $56.79 million. NUKZ has an expense ratio of 0.85%.
As of October 29, its top ten holdings contribute 54.24% of the total portfolio. The top three holdings are Cameco (TSE:CCO), Oklo (OKLO), and Constellation Energy (CEG).
Overall, the NUKZ ETF has a Moderate Buy consensus rating. Of the 39 stocks held in the portfolio currently, 28 have Buys, ten have Holds, and one stock has a Sell rating. Also, the average NUKZ ETF price target of $43.13 implies that shares are almost fully valued at current levels.
Themes Uranium & Nuclear ETF (URAN)
The Themes Uranium & Nuclear ETF seeks to track the performance of the BITA Global Uranium and Nuclear Select Index (BGUNSI). The index invests in companies involved in uranium mining, exploration, refining, processing, and royalties, as well as those focused on nuclear energy, equipment, technology, and infrastructure.
Notably, URAN has one of the lowest expense ratios of 0.35%. The ETF was recently launched on September 24, 2024. A relatively smaller fund, URAN currently has an AUM of $2.98 million. Its top ten holdings contributed roughly 60% of the total portfolio. URAN’s top three holdings include Constellation Energy, NuScale Power (SMR), and Cameco.
On TipRanks, the URAN ETF has a Moderate Buy consensus rating based on 26 Buys and nine Hold ratings for the stocks. The average URAN ETF price target of $35.77 implies 9.2% upside potential from current levels.
Sprott Junior Uranium Miners ETF (URNJ)
The Sprott Junior Uranium Miners ETF seeks to track the performance and investment results of the Nasdaq Sprott Junior Uranium Miners Index (NSURNJ). The index in turn invests in equity securities of mid-cap, small-cap, and micro-cap companies that are involved in uranium mining-related businesses.
URNJ was founded on February 1, 2023, and carries an expense ratio of 0.80%. Currently, the fund has an AUM of $319.09 million, with the top ten holdings contributing 76.68% of the total portfolio. The top three holdings are Uranium Energy (UEC), NexGen Energy (NXE), and Denison Mines (DNN).
Overall, URNJ has a Moderate Buy consensus rating on TipRanks. This is based on 17 Buys versus 17 Hold ratings for the stocks. The average URNJ price target of $32.41 implies an impressive 36.3% upside potential from current levels.
Concluding Thoughts
Amid the growing decarbonization efforts worldwide, nuclear energy is emerging as a promising option for generating clean energy. Although nuclear energy comes with a host of challenges, many companies are starting to show interest in this source.
ETFs like NUKZ, URAN, and URNJ offer these benefits, allowing investors to explore this energy sector further. It’s wise to do some thorough research before investing in them.
