Long Term Power
The Global X Uranium ETF offers exposure to uranium mining companies worldwide, with the vast majority of mined uranium being used in the nuclear energy industry. While the nuclear industry faces uncertainty in the near term, it remains a critical base load energy source that utility companies must draw upon to meet the energy needs of their customers.
Base Load Energy - Nuclear power is a key base load energy source, which is the minimum amount that a power plant must produce to meet utility needs. Unlike solar and wind power, nuclear energy is not dependent on weather conditions.
Efficient Fuel - A single uranium fuel pellet contains as much energy as 480 cubic meters of natural gas, 807 kilos of coal or 149 gallons of oil (World Nuclear Association, 2014).
Long Term Power
Low Input Cost - The cost of fuel accounts for just 28% of the total electric power production cost in a nuclear reactor (compared to 89% for a natural gas fired facility and 78% for a coal fired facility), suggesting that higher prices for uranium would have relatively less impact on end demand (World Nuclear Association, 2014).
Low-Emission Fuel - Greenhouse gas emissions from nuclear energy are a small fraction compared to traditional energy sources, equivalent to 3.27% of coal emissions, 3.96% of oil emissions and 5.81% of natural gas emissions (World Nuclear Association, 2014).
Emerging Market Growth
Reactor Construction - China, India and Russia have a combined 46 nuclear reactors under construction and 86 currently in planning stages (World Nuclear Association, April 2013).
Urbanization - The World Energy Outlook 2012 finds that nearly 1.3 billion people worldwide do not have access to electricity. Global electricity demand will continue to grow and is likely to touch almost 32,000 TWh by 2035 - over half of this increase will come from China and India alone, which are both investing heavily in nuclear power. (IEA)
Supply Gap - Recovery of uranium prices after 2003 led to significant activity in new mine construction. Projected world uranium demand will be about 189 million pounds in 2015, most of which will be supplied directly from mines. However, by 2030 the demand will grow to 356 million pounds, while mine production will be only 252 million pounds. The increasing number of nuclear reactors and reduction in new mine investment could increase the supply gap dramatically. (World Nuclear Association, 2013)
 
 
 
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DISCLOSURE
In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from 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. Narrowly focused investments may be subject to higher volatility. There are additional risks associated with investing in Uranium and the Uranium mining industry, including restrictive regulations, accidents, breaches of security, ill-intentioned acts or terrorism, air crashes, natural disasters, equipment malfunctions or mishandling in storage, handling, transportation, treatment or conditioning of substances and nuclear materials. Current and future holdings are subject to risk.
Because the Fund primarily invests in stocks, American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) of companies that are involved in the metals industry, it is subject to certain risks associated with such companies. Competitive pressures may have a significant effect on the financial condition of such companies in the metals industry. Also, these companies are highly dependent on the price of the metals. These prices may fluctuate substantially over short periods of time, so the Fund’s share price may be more volatile than other types of investments. Metal companies may also be significantly affected by import controls, worldwide competition, liability for environmental damage, depletion of resources, and mandated expenditures for safety and pollution control devices.
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Global X Management Company, LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co., which is not affiliated with Global X Management Company or any of its affiliates.