As the world hurtles into an era of electrification powered by electric vehicles, data centers, and artificial intelligence, the demand for reliable, low-emission energy sources has reached unprecedented levels. While wind and solar tend to dominate headlines, nuclear energy is quietly staging a resurgence, emerging as a critical pillar in the global energy mix. For investors, this renaissance presents a once-in-a-generation opportunity to capitalize on a transformative trend [1].
Nuclear’s Resurgence
Support for nuclear power is at its highest since the 1970s, with over 40 countries adopting policies to expand their nuclear capabilities. Globally, nuclear energy already accounts for 9% of electricity production and is the second-largest source of low-emission electricity after hydropower. But this is just the beginning.
China and Russia are leading the charge, with 48 of the 52 reactors built since 2017 located in these two countries. China alone is poised to overtake the U.S. and EU in nuclear capacity by 2030, positioning itself as the global leader in this space. Meanwhile, advanced economies are grappling with aging infrastructure; most reactors in these regions are over 36 years old. The urgency to replace or expand existing capacity is creating fertile ground for investment.
The Promise of Small Modular Reactors (SMRs)
One of the most exciting developments in the nuclear space is the rise of small modular reactors (SMRs). These next-generation reactors are designed to be cost-efficient, scalable, and faster to construct than traditional nuclear plants. The first commercial SMRs are expected to come online by 2030, and their potential applications are vast—from powering data centers and industrial operations to supplying heat for district heating systems and even producing hydrogen.
SMRs could fundamentally reshape the economics of nuclear energy. By lowering upfront investment costs and offering modular scalability, they are attracting significant interest from both public and private investors. According to optimistic scenarios, SMR capacity could reach 190 GW by 2050, requiring nearly $900 billion in cumulative investments.
Following the Money
Investors are already taking notice. Annual investment in nuclear energy has nearly doubled since 2020, reaching over $60 billion in 2023. This growth underscores a broader trend: nuclear energy is no longer the domain of state-run enterprises. The private sector is stepping in, driven by the potential for stable returns and the critical role nuclear plays in achieving net-zero goals.
Overcoming Challenges
Despite its promise, nuclear energy faces significant hurdles—particularly in advanced economies. Cost overruns and extended construction timelines have plagued high-profile projects in the U.S., France, and the UK. However, these challenges are not insurmountable. Governments are increasingly stepping in with supportive policies, streamlining regulations, and creating robust frameworks for nuclear growth.
Emerging markets, led by China, offer a compelling contrast. These countries have demonstrated an ability to deliver nuclear projects on time and within budget, setting the stage for rapid capacity expansion. For investors, this dichotomy creates opportunities to back well-run projects in both advanced and emerging economies.
Nuclear Energy’s Diverse Potential
Beyond electricity generation, nuclear energy offers diverse applications that enhance its investment appeal. Co-generation—the simultaneous production of electricity and heat—is gaining traction, with nuclear plants supplying heat for district heating systems, desalination projects, and even hydrogen production. These applications broaden the revenue streams for nuclear operators, creating additional opportunities for investors.
The Case for Action
The global energy landscape is at a crossroads, and nuclear energy is poised to play a pivotal role in shaping its future. The convergence of rising electricity demand, technological innovation, and supportive policies creates an opportunity for investors. As SMRs enter the market and advanced economies address their aging fleets, the stage is set for a nuclear renaissance.
Investing in nuclear energy today is about more than capitalizing on a trend—it’s about staking a claim in the future of energy. Whether through direct investments in nuclear operators, partnerships with SMR developers, or funding supply chain innovations, there appears to be no better time to get involved.
How May Investors Seize The Opportunity in The Nuclear Energy Sector?
The Range Nuclear Renaissance Index ETF
The Range Nuclear Renaissance Index ETF (NUKZ) seeks to track the performance, before fees and expenses, of the Range Nuclear Renaissance Index. The index aims to track the performance of a portfolio of stocks that are involved in the nuclear fuel and energy industry.
[1] Unless otherwise noted all information is from: International Energy Agency. The Path to a New Era for Nuclear Energy. IEA, 2024, https://www.iea.org/reports/the-path-to-a-new-era-for-nuclear-energy. Accessed 16 Jan. 2025.
Risk Disclosures:
Carefully consider the Fund's investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund's full or summary prospectus, which may be obtained by visiting www.rangeetfs.com/nukz. Read it carefully before investing or sending money.
Investing involves risk, including possible loss of principal. There is no guarantee the Funds will achieve their stated investment objectives.
Investments in the energy industry are subject to significant volatility due to changes in commodity prices. Additional risks include changes in exchange rates, government regulation, world events, economic and political conditions in the countries where energy companies are located or do business, and risks for environmental damage claims.
The Fund is non-diversified. Its concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors.
Nuclear companies may be subject to substantial government regulation and contractual fixed pricing, which may increase the cost of doing business and limit the earnings of these companies. A significant portion of revenues of nuclear companies depends on a relatively small number of customers, including governmental entities and utilities. As a result, governmental budget constraints may have a material adverse effect on the stock prices of companies in this sub-industry.
International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Investments in smaller companies typically exhibit higher volatility.
The Fund may invest in securities denominated in foreign currencies. Because the Fund's NAV is determined in U.S. dollars, the Fund's NAV could decline if currencies of the underlying securities depreciate against the U.S. dollar or if there are delays or limits on repatriation of such currencies. Currency exchange rates can be very volatile and can change quickly and unpredictably.
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