Etfs To Capitalize On Trump's Orders To Spur Nuclear Energy

U.S. President Donald Trump is set to sign executive orders today, which will revitalize the American nuclear energy sector. The orders would streamline reactor approval processes, bolster domestic nuclear fuel supply chains and reduce reliance on foreign enriched uranium. The move comes amid increasing U.S. electricity demand, driven by the rapid expansion of artificial intelligence technologies.

The news sparked a rally in uranium stocks, which stand to gain as the United States moves to reduce its dependence on major producers like Russia and China in favor of alternative sources such as Australia. In pre-market trading today, Centrus Energy Corp. (LEU) and Uranium Energy (UEC) soared about 16% each, at the time of writing, while Energy Fuels (UUUU) climbed 13.3%. NuScale Power Corporation (SMR), Oklo Inc. (OKLO) and Nano Nuclear Energy also surged in double digits. 

Strong trading is likely to continue in the ETF world, especially the funds targeting nuclear power companies. These include VanEck Uranium and Nuclear ETF NLR, Themes Uranium & Nuclear ETF URAN, Global X Uranium ETF URA, Sprott Uranium Miners ETF URNM and Sprott Junior Uranium Miners ETF URNJ. 

Key Provisions of the Executive Orders

Expedited Approvals: Federal agencies will be directed to accelerate permits and site approvals for new nuclear facilities.

Federal Support: The Department of Energy and the Department of Defense will identify suitable federal lands and facilities for nuclear deployment (see: all the Alternative Energy ETFs here).

Financial Backing: The Department of Energy will expand the use of loan guarantees and direct loans to support new reactor projects. This leverages the capabilities of the Loan Programs Office, which was revitalized under former president Joe Biden, despite recent staffing cuts under the Trump administration.

ETFs Set to Surge

VanEck Uranium and Nuclear ETF (NLR) 

VanEck Uranium and Nuclear ETF tracks the MVIS Global Uranium & Nuclear Energy Index, holding 28 stocks in its basket. American firms account for a 47.4% share, while Canada, Italy and Australia round off the next three spots. VanEck Uranium and Nuclear ETF has gathered $1.1 billion in its asset base and trades in a volume of 107,000 shares a day on average. It charges 56 bps in annual fees.

Themes Uranium & Nuclear ETF (URAN) 

Themes Uranium & Nuclear ETF seeks to track the BITA Global Uranium and Nuclear Select Index, which identifies companies that derive their revenues from uranium mining, exploration, refining, processing, and royalties, as well as nuclear energy, equipment, technology, and infrastructure. It holds 34 stocks in its basket with American firms accounting for 51.7%, while Canada, Australia and China make up for 15.3%, 10.4% and 10% share, respectively. Themes Uranium & Nuclear ETF has gathered $5.8 million in its asset base and charges 35 bps in annual fees.

Global X Uranium ETF (URA) 

Global X Uranium ETF provides investors access to a broad range of companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries. It tracks the Solactive Global Uranium & Nuclear Components Total Return Index and holds 48 stocks in its basket. Canadian firms make up for the largest allocation in the basket at 39.7% while United States accounts for 16.6% share. Global X Uranium ETF has amassed $2.9 billion in its asset base and charges 69 bps in annual fees. It trades in average daily volume of 2.5 million shares.

Sprott Uranium Miners ETF (URNM) 

Sprott Uranium Miners ETF provides exposure to companies involved in the mining, exploration, development and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 75 bps in annual fees. Sprott Uranium Miners ETF holds 35 stocks in its basket and has AUM $1.4 billion in its asset base. It trades in a good volume of 465,000 shares per day on average.

Sprott Junior Uranium Miners ETF (URNJ) 

Sprott Junior Uranium Miners ETF is the only pure-play ETF focused on small uranium miners, selected for their significant revenue and asset growth potential. It tracks the Nasdaq Sprott Junior Uranium Miners Index, which is designed to track the performance of mid-, small- and micro-cap companies in uranium-mining-related businesses. Sprott Junior Uranium Miners ETF holds 31 stocks in its basket and charges 80 bps in annual fees. Sprott Junior Uranium Miners ETF has accumulated $229.4 million in its asset base and trades in average daily volume of 198,000 shares (read: Inside Last Week's Wall Street Rally & Best-Performing ETF Areas).

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This article originally published on Zacks Investment Research (zacks.com).

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