Uranium is a metallic element that appears in the usage of X-rays, ammunition, shields against radiation, counterweights in gyroscopes, and more. While it is used for a wide variety of things, it is most known and used for nuclear energy. Because of the rising popularity of nuclear energy, the demand for uranium has grown. As a result, investors that are looking to invest in commodities have been turning to uranium investment.
Unlike precious metals like gold or silver, uranium is not available physically. However, investors have the option to buy liquid futures contracts for the metal. As well, stocks and funds of uranium production companies can be bought and/or traded. Investors also have the opportunity to purchase Exchange Traded Funds (ETFs) that invest in uranium, which can help them to diversify their investment strategies.
Uranium Futures
Purchasing futures contracts is one way of uranium investment. Although there are several options, those who are looking into invest in uranium through futures contracts are highly suggested to purchase them from the CME Group.
Uranium futures tracks U3O8, a form of the element, as a way to see how valuable the metal is, and how pure. Each contract represents 250 pounds of uranium.
Uranium Stocks
Many companies engage in the production of uranium, thus there is an abundance of stocks to choose from. It is important for investors to research on each company before buying its stock to gain a better understanding of how widespread the company is and if they’re worth investing in. For example, Uranerz Energy Corporation ($URZ), a U.S.-based company, focuses more on mining and production, while Uranium Energy Corporation ($UEC) focuses mainly on mining but does so a bit more globally–the company is Canada-based but a large amount of mining is done in Paraguay.
A company that is usually at the forefront when it comes to uranium investing in the form of stocks is Cameco Corporation ($CCJ), who focuses on the production and refinement of uranium. However, Cameco has recently seen some trouble, as another company had canceled a rather large sales contract. Thus, it is important to keep up with uranium news today so one can have a clearer idea of what company to invest in.
Uranium ETFs
ETFs are typically more attractive to investors as it typically is a lower-risk form of investment compared to stocks. The most direct ETF for those interested in uranium invest is provided by Global X’s Uranium ETF ($URA). The URA tracks a bunch of uranium miners.
There are two other funds also available–Market Vectors Uranium+Nuclear Energy ETF ($NLR) and S&P Global Nuclear Energy Index Fund ($NUCL)–that have less of a focus on uranium but still allow investors to be exposed to uranium investment.
NLR is good for investors who are interested in investing in other elements of nuclear energy, as the fund invests in companies all over the world who are playing part in the nuclear energy industry, including those only focused on the mining and production of uranium. Similarly, NUCL also focuses more on nuclear energy firms and is not specifically aimed towards uranium investing.
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