The nuclear energy sector is experiencing a powerful revival, driven by macroeconomic shifts and technological innovation. For financial advisors and investors, understanding these trends is key to identifying investment opportunities as the nuclear energy landscape evolves.
Recent global events underscore the importance of energy security. The “Russian invasion of Ukraine really was an awakening for global governments and the populace that…energy is national security,” said Tim Rotolo, founder and CEO of Range Fund Holdings, who designed the Range Nuclear Renaissance Index (NUKZX). This revelation pushed nuclear power into the spotlight as countries strive for stable, low-carbon baseload power, he noted.
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A major catalyst for renewed nuclear investment comes from the artificial intelligence (AI) and technology sectors. “Just in the [last]couple [of]years, you’ve seen restarts like Palisades… Microsoft and Meta and Amazon [are saying], ‘we need power, and we are willing to pay for it,” Rotolo explained. Their demand for reliable, scalable electricity is accelerating growth in the sector and bringing new forms of capital and lobbying power. Rotolo said the partnership between big tech and nuclear has been a real driver, which he expects will continue.
However, it’s important to note that there are more demand driver than AI. “The entire globe is waking up to the idea that if we want to decarbonize and electrify, nuclear is probably the single best solution,” Rotolo added.
Investment Opportunities in Nuclear Energy
From an investment perspective, Rotolo emphasized nuclear energy’s fundamental characteristics: “If you think about the Venn diagram of all the things you would want, [nuclear]is right in the middle. It’s clean, it’s safe, it’s base load, and it’s incredibly scalable.” He cautioned that nuclear power is currently expensive and takes a long time to build. But it’s possible to improve upon that.
Safety remains a critical topic, often cited by investors and the public alike. However, Rotolo pointed to data that shows it’s the single safest form of power per terawatt hour produced. Notably, it’s even safer than wind, solar, or fossil fuels.
“All of the nuclear waste that the world has ever produced can be put inside of a football field about 10 feet deep,” Rotolo said. Regulatory costs and safety requirements add complexity, but new policy efforts aim to lower these barriers. “This administration…is trying to reduce some of the regulatory red tape to lower the costs and accelerate the development of nuclear. That’s been missing — that’s one of the reasons why nuclear hasn’t grown faster.”
A High-Growth, Thematic Fit for Portfolios
For portfolio construction, nuclear energy fits as a high-growth, thematic allocation. Rotolo differentiated between secular, long-term exposure to nuclear and the more cyclical nature of uranium investing. Furthermore, he advised that “for investors who have a long-term orientation, and they want to take some exposure away from that global growth bucket, I think this is a great place to add that exposure.”
NUKZX is the underlying index for the Range Nuclear Renaissance Index ETF (NUKZ).
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