How to Invest in Uranium Commodities - dummies

How to Invest in Uranium Commodities

By Amine Bouchentouf

For a number of reasons — environmental, political, geopolitical — there’s a strong push to move away from fossil fuel commodities as the main sources of energy and toward alternative energy sources such as nuclear, wind, and solar. As a result, these alternative sources can give you some solid moneymaking opportunities. Investing in uranium through ETFs and futures is an investment in nuclear energy.

Uranium ETFs

In addition to getting direct equity exposure to the commodity, you can invest in uranium companies with the convenience of an exchange-traded fund (ETF). In 2010, ETF provider Global X Funds out of New York launched the first-ever uranium-based ETF, the Global X Uranium ETF (NYSE: URA).

URA tracks a basket of the most actively traded uranium stocks, as measured by the Solactive Global Uranium Index, its underlying benchmark. As such, URA gives you exposure to some of the most high-profile names in the industry, including Cameco, Uranium One, Paladin Resources, Denison Mines, and Kalahari Minerals.

If you’re looking for broad-based exposure to the uranium equity markets, URA is a good choice for your investment objectives. For more information on URA, visit Global X Funds.

Uranium futures

If you have a good grip on futures trading and are looking for a new instrument to add to your portfolio, you can now invest directly in uranium itself. The Chicago Mercantile Exchange (CME) now offers the UxC (CME: UX), the first contract of its kind that gives you direct exposure to this precious resource. For more information on this contract, visit the CME Group.

Trading futures contracts involves a higher degree of risk due to the use of margin, volatility, and other factors. Make sure that you trade futures contracts only if you already have plenty of experience.

For more information on nuclear power, the Energy Information Administration (EIA) has an excellent website with all sorts of practical information on this industry. The Ux Consulting Company is a great resource for everything regarding uranium and nuclear power.