Investors tap in to nuclear with Global X ETF

Yasmine Raso

Senior Journalist, Financial Newswire

8 December 2022

In its third product launch since its rebrand, Global X ETFs Australia has unveiled the Global X Uranium ETF (ATOM) providing investors with access to the uranium and nuclear power sector.

Joining Global X’s 25-strong product suite, ATOM tracks the Solactive Global Uranium and Nuclear Components Total Returns Index to provide exposure to companies involved in uranium mining and nuclear components production, including extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries.

Blair Hannon, Head of Investment Strategy at Global X, said the ETF launch comes at a time that demand for uranium is on the rise as nuclear power continues to elevate as a “crucial power source” to enable the transition to green and clean energy.

“Nuclear power capacity is set to dramatically increase in the coming decades, with projections anticipating a 17% rise from current levels by 2035 and another 71.5% by 2050,” he said.

“The case for uranium is perhaps the strongest it’s been in a decade, and this is where we see the investment appeal for Australian investors.”

“However, nuclear power remains one of the few sources of electricity that combines large-scale power output and low greenhouse gas emissions, with costs comparable to those of traditional fossil fuel power stations.

“As governments pledge to reduce fossil fuel reliance, nuclear could be a viable bridge while more renewable capacity is built. Increasing adoption is anticipated to drive up uranium prices over the medium to long-term as supply will not come to market fast enough to keep up with demand.”

This is ATOM’s first step into the Australian market after a successful foray in the United States for many years.

“ATOM’s comparable fund in the US has been very well received by our clients in that market, so we are expecting to see similar uptake in Australia – particularly as investing in uranium and nuclear technologies can be difficult to navigate,” Hannon said.

“In constructing this fund we have taken into consideration key concerns for investing in uranium such as geopolitical, social and environmental issues to help investors minimise risk, while leveraging structural tailwinds in the uranium sector.”