Investors still fancy Uranium ETFs despite EU's nuclear dilemma

Investors continue to pump capital into Uranium ETFs on bets of increased nuclear adoption in Asia and the possible inclusion of Nuclear Energy in the EU's green finance taxonomy. Year-to-date, the 4 ETFs with exposure to Uranium or Nuclear Energy have received over $135 million — despite a third straight month of performance decline. In January, Global X Uranium ETF (URA), Horizons Global Uranium Index ETF (HURA), and North Shore Global Uranium Mining ETF (URNM) fell by almost -10%. Meanwhile, VanEck Vectors Uranium+Nuclear Energy ETF (NLR), which has less exposure to Uranium miners compared to the rest, inched -2.94% lower over the same period.

The decline is attributed to the fall in Uranium prices, which reached a 4-week low of $44/lbs, amid lower demand and eased concerns of supply shortages. Fears of interrupted production in the largest Uranium producer, Kazakhstan, faded after political turmoil in the country did not affect Uranium mining operations and its supply chain, as investors previously feared. Also weighing down on Uranium is the objection of several members states of the European Union to the draft plan to label nuclear power plants as a sustainable energy source, citing high costs and safety concerns. Opposing members, Austria and Luxembourg have already signaled that they are ready to take the dispute over nuclear energy to court. "We have always said, when the Commission continues on this road, Austria will take legal steps," Austrian Climate and Energy Minister Leonore Gewessler said on her arrival to a meeting of EU energy ministers in Amiens, France, on January 21st.

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