Global X powers Aussie portfolios with new Uranium ETF
Global X ETFs Australia (Global X) is today launching the Global X Uranium ETF (ASX: ATOM) to give local investors exposure to the growing uranium and nuclear power sector.
ATOM tracks the Solactive Gloabal Uranium & Nuclear Components Total Returns Index to provide access to a broad range of companies involved in uranium mining nuclear components production, including those in extraction, refining, exploration, or manufacturing of equipment for the uranium and nuclear industries.
Blair Hannon, Head of Investment Strategy, says uranium demand will continue to increase as nuclear power use rises around the world as a crucial power source to facilitate the clean energy transition.
“Nuclear power capacity is set to dramatically increase in the coming decades, with projections anticipating a 17% rise from current levels by 2035 and another 71.5% by 2050.[1] 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,” Hannon said.
“However, 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. 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.”
ATOM has been available for Global X clients in the United States for many years and Hannon says Australian investors are ready to gain access to uranium and its powerful growth potential.
“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.
“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,” Hannon said.
ATOM is the third ETF launched by Global X ETFs Australia since it rebranded from ETF Securities in September 2022. It joins a diverse product suite of more than 25 ETFs with almost $5 billion in assets under management in Australia.
[1] GE Hitachi Nuclear Energy. (n.d.) Nuclear power basics. General Electric. Accessed on April 19, 2022.
