Global X ETFs Australia has introduced a new fund with the goal of providing Australian investors with exposure to the growing uranium and nuclear power sectors.
Trading on the ASX under the ticker code ATOM, the Global X Uranium ETF tracks the Solactive Global Uranium & Nuclear Components Total Returns Index to provide access to companies that are involved in uranium mining and the production of nuclear components.
This covers a broad range of companies, including those involved in the extraction, refining, exploration, and manufacturing of equipment for the uranium and nuclear industries.
According to Global X ETFs Australia’s head of investment strategy, Blair Hannon, demand for uranium is set to continue to rise in line with the increased use of nuclear power, which is seen as a crucial power source in facilitating the clean energy transition.
“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,” he said.
Nuclear power capacity is projected to rise by 17 per cent by 2035 and 71.5 per cent by 2050.
This is the third ETF launched by Global X ETFs Australia since it rebranded from ETF Securities back in September, following the Global X Green Metal Miners ETF in October and the Global X Copper Miners ETF in November.
“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,” said Mr Hannon.
“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.”
Mr Hannon noted that nuclear power remains one of the few sources of electricity that combines large-scale power output with low greenhouse gas emissions.
“As governments pledge to reduce fossil fuel reliance, nuclear could be a viable bridge while more renewable capacity is built,” he suggested.
“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.”
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
