Which Nuclear Energy ETF Is Right For You? (NLR, PKN, NUCL)

Daniela Pylypczak: In recent years, nuclear energy has adapted somewhat of a negative connotation, as several scares, most notably Japan’s Fukushima crisis, have left many to become skeptical of the alternative power source. Nuclear energy is prized for being clean and relatively cheap, but safety concerns have stirred up controversies surrounding the commodity. Despite the understandable weariness investors may have, nuclear power continues to maintain its foothold in the global energy space [for more alternative energy news and analysis subscribe to our free newsletter].

Since direct investments in nuclear power are not possible, investors have turned towards the equity market for exposure. And thanks to the development of the exchange-traded fund industry, there are now several ways to gain access to this alternative energy source. Below, we outline the three most popular nuclear energy ETFs and which one will better fit your investment objectives.

Market Vectors Uranium+Nuclear Energy ETF (NYSEARCA:NLR)

Quick Stats (10/4/2012)

Van Eck’s NLR is by far the largest and most popular option for investors looking to gain access to this intriguing alternative energy segment. Since inception in 2007, the fund has amassed nearly $83 million in total assets, and currently maintains a relatively healthy trading volume of over 36,000 shares a day on average. NLR has a shallow portfolio of just 20 individual holdings, the majority of which are large and mid cap stocks. In terms of country allocations, NLR has significant weightings towards the U.S. and Japan, but also features exposure to Canada, France, Australia, and Poland [see also 25 Ways To Invest In Alternative Energy].

NLR is Right for You if: You are an active trader seeking to either speculate on nuclear energy’s movements or quickly execute positions in the commodity. 

Global Nuclear Portfolio (NYSEARCA:PKN)

Quick Stats (10/4/2012)

PKN is another popular option for investors looking to add nuclear energy exposure to their portfolios. The fund tracks an index that is designed to measure the overall performance of publicly traded companies engaged in the industry. PKN aims to spread its exposure across multiple sub-sectors withing thenuclear energy industry, including reactors, utilities, construction, technology, and fuels. The resulting portfolio consists of over 60 individual securities, which have a significant tilt towards stocks from the U.S. and Japan, but is much more concentrated in U.S. allocations than NLR.

PKN is Right for You if: You are an investor looking to achieve exposure to the nuclear energy market, but want a greater allocation to U.S. equities. 

S&P Global Nuclear Energy Index Fund (NASDAQ:NUCL)

Quick Stats (10/4/2012)

Although iShares’ NUCL is not as large or as popular as the other ETFs on this list, it does have the lowest expense ratio, coming in at a mere 0.48%. NUCL also features a significant allocation to giant and large cap stocks, giving investors a relatively “safer” play on the nuclear energy industry. Like the other two ETFs, NUCL is biased towards U.S. and Japanese equities, but Canada, the United Kingdom, and Germany also receive meaningful allocations. Since its debut in 2008, the fund has accumulated over $10 million in total assets, buts its average trading volume comes in at a rather dismal 500 shares a day [see also Why Alternative Energy Will Never Become Widespread (In Our Lifetime)].

NUCL is Right for You if: You are a cost-conscious investor looking to gain exposure to nuclear energy equities, but want a greater allocation to “safer” giant and large cap stocks.

Written By Daniela Pylypczak From CommodityHQ  Disclosure: No Positions.

CommodityHQ offers educational content, analysis, and commentary on global commodity markets. Whether you’re looking to speculate on a short-term jump in crude or establish a long-term allocation to natural resources, CommodityHQ has the information you need.


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