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Uranium ETF (URA) Hits New 52-Week High

For investors seeking momentum, Global X Uranium ETF URA is probably on radar. The fund just hit a 52-week high and is up 65.4% from its 52-week low price of $18.31/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

URA in Focus

The underlying Solactive Global Uranium & Nuclear Components Total Return Index seeks to track the price movements in shares of companies which are active in the uranium industry. The fund has allocations to the energy and industrial sectors, with share of 61.8% and 18.6%, respectively. The product charges 69 bps in annual fees (See: all Materials ETFs here).

Why the Move?

The upbeat outlook in the sector results from growing interest in nuclear energy, which has led several developed nations to invest in new infrastructure projects while extending the operational life of their existing nuclear power stations. The ongoing energy issues and the requirement for dependable, environmentally friendly energy sources are helping in the sector’s upsurge.

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The latest COP-28 powered the ETF. At COP28, delegates from around 200 countries reached an agreement to initiate the reduction of global fossil fuel consumption, signifying a critical step in reducing the worst effects of climate change and the ultimate departure from the era of oil dependence.

Driven by robust market demand and bright prospects, according to carbon credits, the uranium spot price hit its 15-year peak, reaching $85 per pound, supporting analyst estimates for a future market rally in the metal’s price.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 56.50, which gives cues of a further rally.

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Global X Uranium ETF (URA): ETF Research Reports

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Zacks Investment Research