U.S. president Joe Biden’s $2 trillion plan includes initiatives to help bolster jobs in America, including a push for clean electricity via energy sources like nuclear power. This may help put the Global X Uranium ETF (URA) back on the map.
URA can give ETF investors niche exposure when compared to a broad-based clean energy fund. The announcement of the plan has been having a positive effect thus far, with the fund up close to 7% the past 5 days.
“As the recent Texas power outages demonstrated, our aging electric grid needs urgent modernization,” a White House fact sheet noted. “The President’s plan will create a more resilient grid, lower energy bills for middle class Americans, improve air quality and public health outcomes, and create good jobs, with a choice to join a union, on the path to achieving 100% carbon-free electricity by 2035.”
Overall, URA seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Uranium & Nuclear Components Total Return Index. The fund invests at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) based on the securities in the underlying index.
The underlying index is designed to measure broad-based equity market performance of global companies involved in the uranium industry. URA is up to almost 30% year-to-date.
“Among broader energy sector investments, the plan would support the development and demonstration of advanced nuclear energy, a clean energy technology critical not only for meeting mid-century climate goals but for ensuring a more resilient energy infrastructure in the decades to come,” said Judi Greenwald, executive director of the Nuclear Innovation Alliance (NIA).
Energy Efficiency via Nuclear Power
The White House fact sheet noted that existing electrical infrastructure is in need of a major overhaul, which is where nuclear power can come into play. A US Department of Energy study revealed that power outages cost the US economy up to $70 billion on an annual basis.
“In his plan, Biden calls on Congress to invest USD100 billion to build a more resilient electricity transmission system and to spur jobs modernizing power generation and delivering clean electricity,” a World Nuclear News report noted. “He proposes a 10-year extension and phase down of an expanded direct-pay investment tax credit and production tax credit for clean energy generation and storage.”
“The plan also aims to mobilize private investment to modernize the power sector,” the article added. “An Energy Efficiency and Clean Electricity Standard will also be established to cut electricity bills and electricity pollution, increasing competition in the market, incentivizing more efficient use of existing infrastructure, and continuing to leverage the carbon pollution-free energy provided by existing sources ‘like nuclear and hydropower.'”
For more news and information, visit the Thematic Investing Channel.