Which Nuclear Energy ETF Is Right For You? NLR vs. PKN vs. NUCL

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 (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 (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 the nuclear 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 (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.

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Disclosure: No positions at time of writing.

About Daniela Pylypczak

Daniela Pylypczak-Wasylyszyn is a regular contributor to CommodityHQ.com, where she primarily focuses on commodity producers equities. She is also an analyst for ETFdb.com, where she contributes articles and analysis each week. Since joining the team in 2011, Daniela has quickly grown to be one of the most widely-followed authors in the industry. Her articles are syndicated in a number of online publications, including Financial Advisor Magazine, Fidelity.com, and Yahoo! Finance. Daniela is also a contributor for TraderHQ.com and Dividend.com. Daniela graduated from DePaul University with a bachelor’s degree in finance and economics.
This entry was posted in Alternative Energy, Asset Allocation, Commodity ETF Analysis, Commodity ETFs, Commodity Producers, Nuclear and tagged , , . Bookmark the permalink.

Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

One Response to “Which Nuclear Energy ETF Is Right For You? NLR vs. PKN vs. NUCL”

  1. [...] Editor’s note: This article by Daniela Pylypczak was originally published on Commodity HQ. [...]

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