Uranium ETF

If you are looking for an ETF that is a bit out of the ordinary, consider a uranium ETF. Uranium is on the periodic table of elements, and is the number one fuel source for power plants and nuclear plants. This metallic chemical is plentiful in nature, which under normal circumstances keeps prices down. Some investors have decided to try out uranium ETFs and see how they perform. It is important to understand what an ETF is and how it may benefit you before jumping into any type of investment.

ETF stands for Exchange Traded Fund. These funds track indexes such as the Dow Jones, NASDAQ, etc. When an investor purchases shares of an exchange traded fund, they are purchasing shares of a particular portfolio that keeps track of return and yield of the index from which it originated. ETFs do not try to outdo their index, but match it. Replicating the market’s performance is the number one goal. Although exchange traded funds have been in existence since the 80s, it has only been within the last decade that they have gained popularity with investors. The exchange traded fund combines diversification with simplicity, and offers investors flexibility.

For example, you can buy exchange traded funds on margin, short sell your shares, or hold on to them for a long term basis. ETFs are managed passively, meaning the manager makes only small, periodic adjustments. This lowers the level of risk as far as management is concerned. Exchange traded funds are tax efficient, because there are fewer transactions involved. And, there are lower management fees which equals higher returns for you. These are only two reasons ETFs are becoming so popular with investors these days.

Exchange traded funds are traded just like stocks. They are priced and traded throughout the trading period of each day. They are broader when it comes to diversification, because the value is based on their index. They are representative of baskets of different stocks rather than a single stock, therefore they have better liquidity and less risk. This does not mean that ETFs are risk free, as practically no investment is risk free. But, you may want to look into them to round out your portfolio. In addition to uranium ETFs, there are many other kinds that you can choose as well. A good investment manager can explain what your options are and give you a picture of the risks versus the potential payoffs.

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