Global X ETFs Australia has released an exchange-traded fund (ETF) focused on companies involved in the mining and refining of uranium for use in power stations, noting its use is increasing in the shift away from fossil fuels.
The Global X Uranium ETF, which carries the Australian Securities Exchange code ATOM, will track the Solactive Global Uranium & Nuclear Components Total Returns Index and will invest in companies in 10 countries involved in the production of nuclear power components, including those used in uranium exploration, extraction and refining, or the manufacturing of equipment for the uranium and nuclear industries.
Global X ETFs Australia head of investment strategy Blair Hannon said the demand for uranium will increase as nuclear power becomes a key part of the transition to clean energy.
“Nuclear power capacity is set to dramatically increase in the coming decades, with projections anticipating a 17 per cent rise from current levels by 2035 and another 71.5 per cent by 2050,” Hannon 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.
“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.”
He said the construction of the ETF took into account concerns about investing in uranium, such as geopolitical, social and environmental issues, to minimise risk while taking advantage of future growth in the uranium sector.
The ATOM ETF is the third fund launched by Global X ETFs Australia following its rebranding from ETF Securities in September 2022 and brings the total number of funds offered by the investment manager in Australia to 26.
The fund has been available for Global X clients in the United States since 2010 and Hannon said it had been well received in that market and a similar uptake was expected in Australia given investing in uranium and nuclear technologies was difficult to navigate.
