ETF Spotlight: NUKZ Glows as Nuclear Power Demand Rises

In an already strong debut year, the Range Nuclear Renaissance Index ETF (NUKZ) surged again this week, fueled by a recent increase in uranium's price 

NUKZ, which has netted more than $30 million in assets since the boutique issuer introduced the fund in January, has risen more than 12% over the past five trading days. It has climbed about 28% during the past month and more than 60% year-to-date. It gained 1.9% in Friday morning trading.

The most recent spurt dovetails with the release of a Chinese stimulus package that aims to right the country's sluggish economy and is likely to boost demand for power as industries revive. China ranks as the world's second largest generator of nuclear power behind only the United States, according to the Nuclear Energy Institute, a Washington D.C.-based trade group, and has 23 reactors under construction. 

The U.S. has also called nuclear power key to its energy plans with Ali Zaidi, the Biden Administration's climate advisor, recently saying the country intended to re-open nuclear plants. 

Uranium Price Hits Two-Month High

Uranium futures were recently trading at $83.30 per ounce, up roughly 5% over the past six weeks and its highest level since early August. That spike has sent stocks that mine and provide other industry-related services upwards. Nuclear fuel provider Cameco Corp. and NexGen Energy, which specializes in uranium exploration and development, have risen 13.5% and 15%, respectively, during the past five trading days and are both up more than 40% over the past month.   

NUKZ, which carries an .85% expense ratio, tracks a market cap weighted index of companies globally that operate within the nuclear fuel and energy industry. The fund's largest holdings are Cameco, at 11%, and energy and services provider Constellation Energy Constellation, at 10% of its portfolio. 

"Nuclear stocks are trending due to growing global demand for clean energy, government support for nuclear power as a low-carbon energy source and rising geopolitical concerns around energy security," etf.com Research Lead Kent Thune said.