In the month since Election Day, plenty of sector and industry exchange traded funds have emerged as beneficiaries of Donald Trump’s stunning victory. One of the Trump trade ideas, and one accessible via ETFs, that is flying somewhat under the radar is nuclear energy.
Just look at the Global X Uranium ETF (NYSEArca: URA), which tracks uranium miners. The previously downtrodden URA is up more than 12% over the past month and is close to taking out its 200-day moving average. URA has not closed above its 200-day line in about three months.
Uranium remains controversial even five years after the 2011 Fukushima disaster in Japan. In response to the fallout, anti-nuclear activists have aggressively petitioned courts to block restarting the plants. Japanese Prime Minister Shinzo Abe has also been a vocal nuclear power proponent, arguing that atomic power, which generated almost one-third of Japan’s electricity pre-Fukushima, helps diminish the country’s reliance on expensive fossil fuel imports.
“While Trump might inject a major boost of energy into the U.S. nuclear industry and the uranium market through deregulation, there are other factors coalescing around the world to make this a stellar new beginning for uranium and nuclear energy,” reports Mining.com.
With nuclear energy industry looking brighter, uranium demand is expected to rise. According to the World Nuclear Association, the number of new nuclear plants due to go online this year and in the next three years is expected to total around 40, and more are planned in the years ahead, mostly in Asia, writes Lawrence Williams for Mineweb.
“The outlook for uranium looks even more bullish when you consider that these contracts are now coming to a close, and uranium is poised to become a very hot commodity once again. Major American and European nuclear reactors are coming off supply in 2017 and 2018, and will be looking for long-term contracts once again,” adds Mining.com.
Another ETF for accessing the nuclear trade is the VanEck Vectors Uranium+Nuclear Energy ETF (NYSEArca: NLR), which takes a broader approach, including exposure to large and more stable utilities.