ETFs Primed to Benefit From America's $2.7 Billion Nuclear Push

The U.S. Department of Energy (“DOE”) recently initiated a major energy security move, awarding $2.7 billion in task orders to three companies to build domestic uranium enrichment capacity over the next decade. Per the terms of the award, the three companies, namely American Centrifuge Operating, General Matter, and Orano Federal Services, will create domestic low enriched uranium (LEU) and high-assay low-enriched uranium (HALEU) enrichment capacity. 

This initiative is designed to wean the nation off foreign suppliers like Russia and jumpstart a "nuclear renaissance" by securing fuel for the existing fleet of 94 commercial reactors and the next generation of advanced reactors.

Financially, this provides a "moat" for domestic players, as the government has essentially guaranteed demand for American-enriched fuel.

For investors, this pivotal federal support strengthens the demand outlook for nuclear fuel and related infrastructure, creating a supportive backdrop for nuclear and uranium-focused as well as broader energy exchange-traded funds (ETFs) that hold uranium miners, fuel cycle firms and nuclear power utilities.

Beneficiaries: From Miners to Next-Gen Reactors

The DOE’s $2.7 billion allocation represents a strategic de-risking of the U.S. nuclear fuel cycle, targeting the enrichment bottleneck to ensure that the domestic 'nuclear renaissance' is not stalled by the nation’s dependence on adversarial foreign supply.. For decades, the United States has been almost entirely dependent on foreign entities for this essential process. 

From the perspective of the stock market, through its subsidiary American Centrifuge Operating, Centrus Energy LEU is a direct recipient of $900 million, solidifying its position as the only U.S. company currently licensed to produce HALEU.

In addition, this funding will also boost other corporations operating in the broader energy sector, ranging from miners to nuclear energy producers like those mentioned below: 

•    The Miners: Domestic uranium miners like Energy Fuels UUUU and Ur Energy URG should benefit from the DOE investment plan, which is expected to strengthen the entire domestic nuclear fuel supply chain, creating a more stable market and increased demand for the U.S.-sourced uranium they produce. 

Another uranium miner, Cameco CCJ, is a part-owner of Global Laser Enrichment (“GLE”), which received a specific $28 million award in this same DOE announcement to advance next-gen enrichment technology.

•    The Next-Gen Pioneers: Oklo OKLO represents the "New Nuclear" movement. Its fast-fission reactors require HALEU to operate. This DOE funding removes the single biggest risk to Oklo’s business model — the lack of available fuel for its upcoming commercial deployments.

•    Broad-based Power Generators: For nuclear power generators like Constellation Energy CEG, the DOE fund allocation addresses their most significant operational risk: a secure and reliable fuel supply, which in turn should unlock growth and financial stability.

The Strategic Case for ETFs

While individual stocks like Oklo or Centrus offer high growth, they also carry high volatility due to their reliance on government milestones. Therefore, investing in nuclear- and uranium-themed ETFs, as well as nuclear power–focused ETFs, may be a smarter way to gain exposure across the entire value chain. These funds balance the high-risk, high-reward profile of reactor startups with the stable cash flows of established miners and utility providers.

By shifting toward these diversified funds, investors can strategically position themselves to benefit from the systemic growth of the nuclear sector without the "single-point-of-failure" risk inherent in individual project timelines.

ETFs to Gain

Considering the aforementioned discussion, investors eager to position themselves for the collective growth of the nuclear sector driven by the DOE’s investment catalyst, may consider the following ETFs: 

Global X Uranium ETF URA

This fund, with net assets worth $6.70 billion, offers exposure to a broad range of 49 companies involved in uranium mining and the production of nuclear components, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries. Its top three holdings include CCJ (23.36%), OKLO (10.32%) and Uranium Energy Corp. UEC (6.94%).  LEU holds the sixth position in this fund. 

URA has rallied 99.5% over the past year. The fund charges 69 basis points (bps) as fees. It traded at a good volume of 6.22 million shares in the last trading session. 

VanEck Uranium and Nuclear ETF NLR

This fund, with net assets worth $4.33 billion, offers exposure to 28 companies involved in uranium mining, the construction, engineering and maintenance of nuclear power facilities and nuclear reactors; the production of electricity from nuclear sources; or providing equipment, technology and/or services to the nuclear power industry. Its top three holdings include CCJ (8.55%), CEG (6.60%) and BWX Technologies BWXT (5.65%). LEU holds the eight position in this fund. 

NLR has surged 73% over the past year. The fund charges 56 bps as fees. It traded at a volume of 0.76 million shares in the last trading session. 

Sprott Uranium Miners ETF URNM

This fund, with net assets worth $2.15 billion, offers exposure to 26 companies that devote at least 50% of their assets to the uranium mining industry, which may include mining, exploration, development and production of uranium, or holding physical uranium, owning uranium royalties or engaging in other non-mining activities that support the uranium mining industry. Its top three equity holdings include CCJ (20.38%), UEC (14.10%) and UUUU (5.27%).  

URNM has soared 61.3% over the past year. The fund charges 75 bps as fees. It traded at a volume of 1.24 million shares in the last trading session.  

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