How to Invest in Uranium
Uranium is a metallic element that is well known for its use in nuclear energy. This metal is one of the most dense, natural-occurring elements in the world as its popularity and uses have been on the rise for a number of years. Uranium’s most prominent uses comes from nuclear fission, of which this commodity is an important part. Aside from its importance to the energy field, uranium also appears in X-rays, ammunition, shields against radiation, counterweights in gyroscopes, and much more.
As an investment, uranium makes for an enticing play as the prominence of nuclear energy continues to grow. For those looking to invest directly in uranium, there are a large number of options in the market place. While physical exposure is not possible, investors can buy very liquid futures contracts for the metal. Additionally, there are a number of stocks and funds that allow investors to buy up companies that are engaged in some aspect of uranium production. Lastly, investors can also purchase any number of ETPs that invest in uranium with varying strategies.
Ways to Invest in Uranium
There are 3 ways to invest in Uranium: ETFs, Futures, and Stocks. Click on the tabs below to learn more about each alternative.
What are Uranium ETFs?
Exchange traded products can be an efficient way to access uranium. The most direct ETF comes from Global X’s Uranium ETF (URA) which tracks a basket of uranium miners. There are also two other funds that offer a more indirect play on uranium, but still give investors exposure to this crucial element.
The Market Vectors Uranium+Nuclear Energy ETF (NLR) invests in companies from all around the world that are involved in the nuclear energy industry, including those that only focus on uranium. Finally, the most indirect play comes from S&P Global Nuclear Energy Index Fund (NUCL) which focuses solely on nuclear energy firms, as opposed to those that are specifically tilted towards uranium.
What are Uranium Futures?
Though there are few options when it comes to uranium futures, investors have one solid choice to invest in such contracts. UX Uranium futures, which are also optionable, are offered from the CME Group. These contracts track U308, a form of the element, and each contract is representative of 250 pounds of the metal.
How to Buy Uranium Stocks
There are a wide variety of stocks and companies who rely on uranium for a substantial portion of their revenues. Uranerz Energy Corporation (URZ) is a U.S.-based firm that engages in the mining and production of the element. Similarly, Uranium Energy Corporation (UEC) mines for the metal with a much more global reach, as it is based in Canada and does a fair amount of mining in Paraguay. Finally, investors can look to Cameco Corporation (CCJ), a company that focuses more on the production and refining of the mineral.