ETF Trends
ETF Trends

The nearly $250 million Global X Uranium ETF (NYSEArca: URA) was back under pressure to start the week as Japan’s unfolding disaster raised more questions around the globe about the future of nuclear energy.

Low-level radiation was discovered in Massachusetts rainwater linked to Japan’s crippled reactors, Reuters reported Monday, underscoring the situation’s wide-ranging consequences.

The uranium exchange traded fund (ETF) was the biggest percentage decliner Monday morning, down more than 4% in brisk trading. The fund entered Monday’s session down nearly 25% over the previous month. The ETF bounced somewhat after the initial sell-off on the Japan news. Now the uranium fund is lower to open the week and trading volume is picking up.

The tracking index is made up of companies globally that are “primarily engaged in some aspect of the uranium mining industry, such as mining, refining, exploration, and manufacturing of equipment for the uranium industry,” according to the ETF’s fact sheet.

Despite the recent sell-off, the uranium ETF may still be backed by solid fundamentals, with demand picking up and a dwindling fixed supply.

The catastrophe in Japan after the massive earthquake and tsunami also triggered steep declines in related ETFs such as Market Vectors Uranium+Nuclear Energy ETF (NYSEArca: NLR), iShares S&P Global Nuclear Energy Index Fund (NYSEArca: NUCL) and PowerShares Global Nuclear Energy Portfolio (NYSEArca: PKN).

Conversely, alternative energy ETFs were rising Monday. Market Vectors Solar Energy ETF (NYSEArca: KWT) and Guggenheim Solar ETF (NYSEArca: TAN) were both up more than 3% in recent trading and have seen big price swings in recent weeks.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.