These ETFs Are Going Nuclear

As “The Simpsons” nuclear energy baron C. Montgomery Burns would say in his slow catch phrase: “… excellent.”

Though they have a history of volatility, nuclear-focused ETFs have been benefiting considerably this year from rising power usage. Big tech companies have been racing to secure power for data centers amid the AI explosion, and more electric vehicles on the road has also meant higher demands on the grid. While wind and solar power have helped meet some of the demand, cleaner energy sources will soon be at a disadvantage relative to nuclear, following legislative changes that are shifting incentives and tax benefits.

“Nuclear ETFs are an attractive option for investors looking to capture the AI surge outside of the usual large-cap technology and semiconductor plays,” said Roxanna Islam, head of sector and industry research at TMX VettaFi.

Changing Times

There are at least nine US-domiciled ETFs focused on nuclear energy, several of which launched in the past year, data from Morningstar Direct show. The biggest of those, the Global X Uranium ETF, represents over $4 billion and has had a return of 44% over the past 12 months. Behind that is the Van Eck Uranium and Nuclear ETF, at $2 billion, returning 46%. Governments around the world have become more receptive to nuclear power in recent years, after turning away from it following the 2011 disaster in Ōkuma, Fukushima in Japan, said Brandon Rakszawski, director of product management at VanEck. 

Analysts at the research firm CFRA are bullish on nuclear power in the US, said Aniket Ullal, head of ETF research. “Nuclear power producers are well positioned for an environment of increasing power demand from artificial intelligence, data centers and domestic manufacturing,” he said. “The regulatory environment remains favorable with nuclear power being one of the relative ‘winners’ under the tax provisions in the One Big, Beautiful Bill.”

Some of the recent boosts for nuclear in the US include:

• The One Big, Beautiful Bill Act, which retained provisions in last year’s Inflation Reduction Act for nuclear energy even as it quickly wound down incentives for wind and solar projects.
• Executive orders by President Trump, which are easing the approval process at the Nuclear Regulatory Commission.

Following the Ikea Model: A new trend is smaller, modular nuclear reactors. Following a 20-year energy deal in Illinois with Meta, Constellation is seeking regulatory approval that could include one. That arrangement highlights the forces at play, and it’s notable that Meta is essentially buying an energy offset, Rakszawski said. VanEck’s approach to nuclear is broad, he added, with the ETF focusing on the upmarket, such as uranium miners, as well as downmarket (power producers) and middle market, which includes industrials. That strategy has paid off as “it’s really difficult to pick those winners and losers from a segment perspective as well as an individual company perspective,” he said.