Nuclear energy is experiencing a comeback in the world of resources, after a few decades of renewable energy sources like solar, wind, and hydro dominating investment. Nuclear is coming back as the clear energy source to meet growing energy needs in Canada and beyond. It remains relatively clean and has become increasingly safe. While there are genuine concerns with nuclear energy, it is clear that nuclear has a key role in the resource industry. However, it will help diversify energy sources while stabilizing the resource supply. Investing in nuclear is simple. People can invest in stocks or nuclear energy ETFs, which we’ll cover in this article. Keep reading to learn more!

Why Nuclear Energy is the Future

Nuclear energy is often considered a significant component of the future energy. With low carbon emissions, it is considered a relatively clean fuel source. Although, this is a highly debated and contentious issue. Nuclear energy may not produce high carbon emissions, but it does create radioactive waste. This waste must be handled with care or could cause other environmental issues, as seen in crises like the Chernobyl disaster.

After several years of nuclear energy being placed on the back burner, it has achieved renewed interest and investment. The global population officially reached 8 billion people on November 15th, 2022. The rapid population growth has placed increased demands on consistent and high-output energy sources. However, carbon emissions are still a concern, so alternative energy sources must be explored.

Nuclear power provides a stable and consistent source of energy. It can operate continuously regardless of weather conditions or time of day. This makes nuclear a necessary part of a diversified power generation system. Most renewable energy sources can only create energy during optimized weather conditions. Renewable energy is an intermittent power source. With 24/7 energy demands, nuclear can produce energy around the clock. With diversified energy production, there is increased energy security. Meaning the world can rest easy knowing energy is being created from multiple sources. If something disrupts one energy stream other streams, like nuclear can ensure a baseline of energy is produced. 

Compared to burning fossil fuels, nuclear produces significantly more energy. It requires less space and resources to produce more energy. An average nuclear plant produces 1 gigawatt of energy per year. It would take two coal plants or up to 4 renewable plants to produce the same amount of energy. Nuclear power generation requires less ongoing maintenance and fuel supplies. Meaning there are reduced efforts and physical labour costs associated with nuclear. 

There have been many advancements in nuclear technology. This means newer reactor designs and safety improvements. Now, nuclear power is safer, more efficient, and potentially more cost-effective. There have also been advancements in the fuel recycling process, which maximize energy output and minimize waste.

Related Reading: Carbon Tax Rebate

How to invest in nuclear power?

Investment in nuclear is possible through many investment types. It is possible to invest in uranium mining companies or other companies that have nuclear-related business. Nuclear-related Exchange-Traded Fund (ETF) is another great option. Check out the ways to invest in nuclear power:

Stocks

Invest in stocks of companies involved in various aspects of nuclear energy. Already mentioned are uranium mining. You can also invest in companies involved with nuclear power plant construction, or nuclear technology development. Look for companies that are: 

• Uranium producers, like Cameco. 
• Nuclear power plant operators, like Constellation Energy Corp.  
• Any companies specializing in nuclear technology or nuclear power plant construction.

Related Reading: 7 Best Canadian Solar Energy Stocks

Mutual Funds

Some mutual funds focus on the energy sector or include holdings in companies related to nuclear power. Research and choose funds that align with your investment goals.

Bonds 

Some energy companies, issue bonds or debt securities to finance their projects. Investing in these securities can provide a fixed income in the form of interest payments. Bruce Power and Ontario Power Generation (OPG) are two companies that issued bonds. 

Infrastructure Funds

Invest in funds that focus on infrastructure projects. You will have to research funds that include energy-related infrastructure projects. Nuclear power plant construction and maintenance could fall under these funds.

Exchange-Traded Funds (ETFs)

Consider investing in ETFs that focus on the energy sector. You can find some ETFs that specifically target companies involved in nuclear energy. These ETFs offer diversification across multiple companies within the sector. We’ll cover some top options in the section below!

Top Nuclear Energy ETFs

Specific ETFs focused solely on nuclear energy might be limited. However, there are energy sector ETFs that include holdings in companies involved in nuclear. Their involvement can be in power generation, uranium mining, or related technologies. Here are some ETFs that include exposure to the nuclear energy sector:

Ticker Symbol	Inception Date	Yield	MER	Risk
URA	November 4th, 2010	0.17%	0.69%	Medium
NLR	August 13th, 2007	1.56%	0.61%	High
URNM	December 3rd, 2019	0%	0.83%	High
XLU	December 16th, 1998	3.38%	0.10%	Medium
FUTY	October 21st, 2013	3.37%	0.08%	Medium
RBLD	October 13th, 2008	1.20%	0.65%	Medium
UTES	September 9th, 2015	2.43%	0.49%	Medium

Global X Uranium ETF (URA)

Global X Uranium ETF (URA) tracks companies in the global uranium mining industry and nuclear components. The fund invests in all energy companies and includes uranium ores mining companies. With 24.42% of their holding in the Canadian uranium mining company Cameco.

VanEck Vectors Uranium+Nuclear Energy ETF (NLR)

VanEck Vectors Uranium+Nuclear Energy ETF (NLR) includes companies primarily involved in various aspects of the nuclear energy industry. This includes nuclear power plant operators, uranium miners, and nuclear technology firms. They have 28 total holdings, with each of their top 10 holdings representing 4.88% to 7.62% of their total assets. Cameco and Constellation Energy Corp. are among their top holdings. 

Sprott Uranium Miners ETF (URNM)

Sprott Uranium Miners ETF (URNM) focuses on uranium miners and physical uranium, an important input for nuclear energy creation. They have 38 holdings. Their three largest holdings are Cameco (15.25%), NAC Kazatomprom JSC (14.75%), and Sprott Physical Uranium Trust (13.66%). All these companies mine or hold uranium.

Utilities Select Sector SPDR ETF (XLU)

Utilities Select Sector SPDR ETF (XLU) focuses on utilities. This includes all types of utilities. Electric utility, water utility, renewable electricity producers, and gas utility industries. This includes a variety of nuclear power plant operators. 

Fidelity MSCI Utilities Index ETF (FUTY)

Fidelity MSCI Utilities Index ETF (FUTY) focuses on utilities. This includes all types of utilities. Electric utility, water utility, renewable electricity producers, and gas utility industries. This includes a variety of nuclear power plant operators. 

First Trust Alerian U.S. NextGen Infrastructure ETF (RBLD)

First Trust Alerian U.S. NextGen Infrastructure ETF (RBLD) focuses on infrastructure. It has a secondary focus on utilities. Many of the ETF’s holdings help build the infrastructure related to nuclear power.

Virtus Reaves Utilities ETF (UTES)

Virtus Reaves Utilities ETF (UTES) focuses on utilities. This includes all types of utilities. Electric utility, water utility, renewable electricity producers, and gas utility industries. This includes a variety of nuclear power plant operators. Their largest holding at 8.27% of their total assets is Nextera Energy. Nextera owns and operates large nuclear plants. 

Related Reading: Types of ETFs in Canada

What is the best ETF for nuclear energy?

The best ETF for nuclear energy can be subjective. It depends on various factors, including financial goals, and risk tolerance. You also need to consider just how much of the ETF you want to be within the nuclear energy sector. Some ETFs do well while maintaining high nuclear investment. Below are the two top preforming nuclear energy ETFs from our list above.

Global X Uranium ETF (URA)

Global X Uranium ETF (URA) tracks companies in the global uranium mining industry and nuclear components. The fund invests in all energy companies and includes uranium ores mining companies. With 24.42% of their holding in the Canadian uranium mining company Cameco.

VanEck Vectors Uranium+Nuclear Energy ETF (NLR)

VanEck Vectors Uranium+Nuclear Energy ETF (NLR) includes companies primarily involved in various aspects of the nuclear energy industry. This includes nuclear power plant operators, uranium miners, and nuclear technology firms. They have 28 total holdings, with each of their top 10 holdings representing 4.88% to 7.62% of their total assets. Cameco and Constellation Energy Corp. are among their top holdings. 

These ETFs hold a mix of companies working in various aspects of the nuclear fuel cycle. This includes uranium mining, enrichment, reactor construction, and nuclear technology development. Most nuclear-heavy ETFs also have some investment in other energy products and industries. These two ETFs maintain high nuclear investment. 

Related Reading: Best Canadian Utilities ETFs

Should I invest in nuclear?

Before investing, conduct thorough research on an ETF or stock in the nuclear energy sector or elsewhere. Consider its holdings, expense ratios, historical performance, and overall investment strategy. Consider consulting a financial advisor to determine if the ETF aligns with your investment objectives. Always make sure to keep investments within your risk tolerance. 

Nuclear energy is experiencing an increase in interest and investment. There are many reasons why it is a promising industry. The world and governments need the energy that can be gained quickly and easily from nuclear energy. Investing in nuclear ETFs, stocks, or bonds may be a good part of a balanced portfolio. 

Read More: 5 Best Green Energy Stocks in Canada