Exchange Traded Funds (ETFs)

Small Uranium Fund Offers Unique Approach

Nuclear energy may be a daunting idea to some, but the trend toward using it is likely to continue. Next in my series on funds targeting this industry is VanEck Uranium+Nuclear Energy ETF (NLR).

This fund’s holdings are a little different from those of its peers in the nuclear and uranium segments. It has fewer than 30 holdings, which may make its performance more volatile than that of many exchange-traded funds (ETFs). And those holdings tend more toward utilities rather than energy, which offers a different approach.

Many of the utilities held in NLR tend to be large-cap companies. The fund also offers international exposure, while still having more than half of assets allocated to U.S. stocks. Weighting is market-cap-based, meaning that a few heavy hitters are large drivers of its overall performance.

NLR is down considerably over the last few weeks, which may offer an attractive entry point for investors, particularly any who suspect its recent highs might be re-achievable.

NLR’s year to date performance, down 4.78%, is still far better than the dismal results in the S&P 500 over that same time of -23.31%. And the fund was up for the year as recently as Sept. 22. NLR has also performed much better this year than many of its more typically organized peers, such as Global X Uranium ETF (URA), which is down 13.6% in the same period.

The 0.60% expense ratio attached to this fund is run-of-the-mill and compensated for by its 2.05% yield. The ETF’s assets under management total just $51.7 million, which means it does fall under my recommended threshold for investment. However, the fund’s strategy is nonetheless interesting and worthy of discussion.

Chart courtesy of www.StockCharts.com

Top holdings for this fund include Public Service Enterprise Group Inc. (PEG), 7.93%; Dominion Energy Inc. (D), 7.87%; Constellation Energy Corp. (CEG), 7.47%; Fortum Oyj, 6.53%; and Entergy Corp. (ETR), 6.44%. The top 10 holdings account for over 60% of its assets.

In addition to the 52.6% weighting in the United States, the other nations most prominently represented include Japan, Canada and France.

For investors looking for ways to invest in the uranium industry, VanEck Uranium+Nuclear Energy ETF (NLR) offers a unique approach to consider.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.