#7 - Global X Uranium ETF (NYSEARCA:URA)
As you can tell, uranium stocks hold a lot of potential, but also carry outsized risk. It’s impossible for many retail investors to know if any of these projects will ultimately pan out. That’s why many investors may benefit from investing in an exchange-traded fund (ETF) focused on uranium stocks. And one of the best to consider is the Global X Uranium ETF (NYSEARCA:URA).
The Global X Uranium ETF currently has $1.35 billion of assets under management and includes several of the names on this list. The fund’s portfolio includes mining companies, refines and equipment manufacturers (I.e. the picks and shovel companies) so investors do get comprehensive coverage of the industry.
However, as a reflection of the risk in this sector, the fund is heavily weighted to one holding, Cameco Corporation which makes up about 23% of the fund’s holdings as of May 2023. Investors may be rewarded for that risk when you look at the five-year performance of the fund which currently sits at 39%.
About Global X Uranium ETF
The Global X Uranium ETF (URA) is an exchange-traded fund that mostly invests in stocks based on a particular theme. The fund tracks a market-cap-weighted index of companies involved in uranium mining and the production of nuclear components. URA was launched on Nov 4, 2010 and is managed by Global X.
- Current Price
- $28.98
- Consensus Rating
- Buy
- Ratings Breakdown
- 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $28.98 (0.0% Downside)
If the world is truly going to achieve a Net Zero emissions future, the world will need to find and unlock new and existing supplies to meet this rising demand. Nuclear power will almost assuredly become part of that conversation, and new uranium discoveries will be increasingly valuable in bringing balance to the market. If that happens, then the law of supply and demand makes it clear that the spot price of uranium will soar.
But make no mistake about it, the price of uranium is highly volatile. At the end of April, the spot price of uranium was up about 10% in 2023. However, it's down about 20% from the nearly 12-year high it made in April 2023.
Rising prices will make it more profitable to mine for uranium. And that's why many of the stocks on this list are those of mining companies. Like the oil market, miners need the spot price of the underlying commodity to be at a point that makes their operations profitable.
More Investing Slideshows:
