As “The Simpsons” nuclear energy baron C. Montgomery Burns would say in his slow catch phrase: “… excellent.”

Though they have a history of volatility, nuclear-focused ETFs have been benefiting considerably this year from rising power usage. Big tech companies have been racing to secure power for data centers amid the AI explosion, and more electric vehicles on the road has also meant higher demands on the grid. While wind and solar power have helped meet some of the demand, cleaner energy sources will soon be at a disadvantage relative to nuclear, following legislative changes that are shifting incentives and tax benefits.

“Nuclear ETFs are an attractive option for investors looking to capture the AI surge outside of the usual large-cap technology and semiconductor plays,” said Roxanna Islam, head of sector and industry research at TMX VettaFi.

Changing Times

There are at least nine US-domiciled ETFs focused on nuclear energy, several of which launched in the past year, data from Morningstar Direct show. The biggest of those, the Global X Uranium ETF, represents over $4 billion and has had a return of 44% over the past 12 months. Behind that is the VanEck Uranium and Nuclear ETF, at $2 billion, returning 46%. Governments around the world have become more receptive to nuclear power in recent years, after turning away from it following the 2011 disaster in Ōkuma, Fukushima in Japan, said Brandon Rakszawski, director of product management at VanEck.

Analysts at the research firm CFRA are bullish on nuclear power in the US, said Aniket Ullal, head of ETF research. “Nuclear power producers are well positioned for an environment of increasing power demand from artificial intelligence, data centers and domestic manufacturing,” he said. “The regulatory environment remains favorable with nuclear power being one of the relative ‘winners’ under the tax provisions in the One Big, Beautiful Bill.”

Some of the recent boosts for nuclear in the US include:

• The One Big, Beautiful Bill Act, which retained provisions in last year’s Inflation Reduction Act for nuclear energy even as it quickly wound down incentives for wind and solar projects.
• Executive orders by President Trump, which are easing the approval process at the Nuclear Regulatory Commission.

Following the Ikea Model: A new trend is smaller, modular nuclear reactors. Following a 20-year energy deal in Illinois with Meta, Constellation is seeking regulatory approval that could include one. That arrangement highlights the forces at play, and it’s notable that Meta is essentially buying an energy offset, Rakszawski said. VanEck’s approach to nuclear is broad, he added, with the ETF focusing on the upmarket, such as uranium miners, as well as downmarket (power producers) and middle market, which includes industrials. That strategy has paid off as “it’s really difficult to pick those winners and losers from a segment perspective as well as an individual company perspective,” he said.

Just like the weather, the markets change, and just like meteorologists, investors try to predict those changes.

Some industries, however, go through regular boom-and-bust cycles. Cyclical industries, encapsulating everything from airlines to raw materials, tend to track the wider economy, with expansions and contractions happening at regular intervals based on the broader market. ETFs tracking cyclicals can offer bullish investors high returns in times of prosperity, but experts said even periodic sectors can be unpredictable. “At a certain point, you’re really making bets on a single stock, or a few stocks, that are really going to be the driver of the returns,” said Dan Sotiroff, research analyst at Morningstar. “That’s what I think a lot of people miss with this stuff.”

What Goes Up…

Cyclical industries like manufacturing, consumer discretionary products, and construction typically thrive in economic expansions but suffer during slowdowns. (Americans tend to cut back on travel and discretionary spending in times of hardship.) Issuers have tried to capitalize on these patterns, carving out niche funds that promise high returns in bull markets.

Take the AdvisorShares HVAC and Industrials ETF launched earlier this year, which bundles companies that manufacture heating and cooling systems, or the Materials Select Sector SPDR Fund (XLB), which follows the materials sector of the S&P 500. (It holds just 29 stocks, with the top 10 making up over 60% of its assets.) Although short-term outlooks can look rosy, investors need to be aware of the long-term risks, Sotiroff said, particularly since cyclical and sector ETFs — unlike thematic ETFs like artificial intelligence or robotics — don’t usually span multiple industries. “[Cyclical ETFs] go through these waves where the biggest companies, the ones driving the return of the ETF, are hitting home runs, and they look great,” he said. “Then six months or a year out, they look terrible.”

Other cyclical industry ETFs include:

• The U.S. Global Jets ETF (JETS), which tracks American and international airlines, plane manufacturers, airports and airline-related communications companies.
• The Consumer Discretionary Select Sector SPDR Fund (XLY), which tracks the consumer discretionary sector of the S&P 500, including categories like entertainment, cars and retail.
• The iShares U.S. Real Estate ETF (IYR), which tracks US real estate companies and real estate investment trusts.

Fee-ble Returns. The other reason investors should be wary of these funds is that a lot of them charge “obnoxiously high” fees, Sotiroff said. (JETS has an expense ratio of 0.60% and HVAC’s is 0.89%.) “Fees dictate performance. They’re charging higher fees because they can, because they’re giving you specialized access to some niche segment of the economy,” he said. “But that tends not to work out very well.”

President Donald Trump’s media company filed an updated application for its Truth Social Bitcoin ETF last week, delaying its launch date amid caution toward crypto at the Securities and Exchange Commission.

The updated filing, which was initially submitted in June, still does not include details such as a fee or ticker symbol. Some say the fund, which will directly track the price of bitcoin, might struggle to differentiate itself. “Bitcoin is effectively digital gold. [It’s] not really being used for transactions the way you know currencies are,” said Jeff DeMaso, founder of the newsletter The Independent Vanguard Advisor. “How much appetite is there for different flavors of digital gold?”

The Bit(coin) Of Your Own Drum

Trump’s bitcoin ETF is one of three filings from Trump Media, which owns his social media platform Truth Social, the other two being the Truth Social Crypto Blue Chip ETF and the Truth Social Bitcoin and Ethereum ETF. Josh Barone, wealth manager at Savvy Advisors, said that having both a bitcoin fund and a more diversified crypto index fund taps into two distinct markets: the “ideological retail investor” who wants a Trump-approved product, and the “broader, crypto-curious crowd.” He added that “fixed supply dynamics, increasing institutional adoption, and a maturing ETF market” have lowered bitcoin’s barriers to entry for investors who wouldn’t otherwise get into crypto. Still, DeMaso says the fund is likely to blend into the background compared to other, more established funds. “I would fully expect the iShares, the Fidelitys of the world to kind of continue to take the bulk of the assets,” he said. “The ETF space is really winner-takes-all, and that race has already started.”

The biggest players in the bitcoin ETF space are:

• The iShares Bitcoin Trust ETF (IBIT), which has over $88 billion in assets;
• Fidelity’s Wise Origin Bitcoin Fund (FBTC), which has $23 billion in assets;
• And Grayscale’s Bitcoin Trust ETF (GBTC), which has $21 billion in assets.

Crypto-Curious. At least in the short run, the product will be successful because of Trump’s political base, the fund’s media attention and pro-crypto policy tailwinds, Barone said. Long-term viability, however, will depend on the success of its “initial adoption phase, followed by consistent execution, transparency, and competitive pricing,” he said. “The branding alone will attract a segment of the market that might otherwise avoid crypto entirely.”