ETF of the Year Nominee: NUKZ Energizes Nuclear Power Renaissance

This is the first in a series of weekly articles previewing the five finalists for ETF of the Year, to be announced in a ceremony April 23 in New York City.

While the Range Nuclear Renaissance Index ETF (NUKZ) technically qualifies as a thematic strategy, the momentum behind the high-flying $200 million ETF might best be described as global and secular.

Launched in January 2024 by Range ETFs in Cold Spring Harbor, New York, NUKZ was among the best-performing exchange-traded funds of 2024 and has been nominated for etf.com ETF of the Year, the winner of which will be announced at an April awards ceremony in New York.

NUKZ, which was up as much as 25% earlier this year before cooling off, has gained more than 32% over the past 12 months by riding a wave that Range Chief Executive Officer Tim Rotolo describes as a “nuclear renaissance demand thesis.”

“This is not a trading strategy,” he said. “You can see that the world is consuming more power, and nuclear and baseload power are secular demand stories.”

NUKZ Bets on Global Energy Demand

NUKZ, which charges 85 basis points, tracks a global market-capitalization weighted index of companies operating in the nuclear fuel and energy industries. Exchange Traded Concepts is listed as the fund's advisor.

As Rotolo explained it, the index is made up of 38 stocks divided into four buckets that represent utilities, fuel, advanced reactors, and services and construction.

“The index is a blend of pure play and diversified companies,” he said. “We’re always looking for pure plays, but there just aren’t enough companies.”

In the most basic terms, NUKZ is a strategy that is designed to position investors to benefit from the increasing global demand for energy and what Rotolo sees as an unavoidable expansion of nuclear power.

“Thermal coal demand is higher every year, but nobody wants to own coal,” he said. “Natural gas is the bridge to nuclear power, and demand is growing by mid-single digits per year.”

According to Rotolo, nuclear energy investing opportunities are uniquely situated between global government pressure to move away from fossil fuels and a general warming of nuclear energy production.

“Right now, nuclear is having its time in the sun because it’s clean, baseload and high capacity,” he said, citing support for nuclear power coming from places like France and Germany.

Attitudes Shift on Nuclear Power

Following the 2011 nuclear power plant meltdown in Fukushima, Japan, which was triggered by an earthquake, global efforts to generate nuclear power were stalled. But Rotolo said the general attitude shift started in 2019 as governments started weighing their options.

“I think we need everything; coal, natural gas and nuclear,” Rotolo said. “We need enough natural gas to phase out coal, while building more nuclear plants so we can then pass the baton to nuclear power from natural gas.”

Range has six ETFs that combine for approximately $250 million, making NUKZ the flagship. But this is not Rotolo’s first ETF success story.

Rotolo was behind the 2019 launch of the North Shore Global Uranium Mining ETF (URNM), which grew to $1.1 billion by the time it was sold to Sprott Asset Management in 2022.

The fund is now known as the Sprott Uranium Miners ETF (URNM).

“We like contrarian themes that are heavy on energy,” Rotolo said. “There is a linear relationship between GDP growth and energy consumption, and nuclear power has to be a growing part of the pie.”