Nuclear Energy ETF Gets a New Index

ETF Trends

The Market Vectors Uranium+Nuclear Energy ETF (NLR) is getting a new index.

On or about March 21, NLR will transition to the Market Vectors Global Uranium and Nuclear Energy Index (MVNLRTR) from the DAXglobal Nuclear Energy Index (DXNE). Market Vectors made the announcement in a statement issued after the close of U.S. markets Thursday.

NLR’s new index “is a rules based, modified capitalization-weighted, float-adjusted index that seeks to track the performance of the global uranium and nuclear energy segment,” according to the statement. The index focuses on diversity and investability, among other factors.

Self-indexing has been a somewhat controversial in recent years as some ETF firms are deciding to manage their own indices rather than pay benchmark licensing fees to third-party providers. Critics assert lack of transparency and potential conflicts of interest as sticking points surrounding self-indexing. [Self-Indexing Trend Raises Concerns]

Market Vectors and WisdomTree (WETF) have been among the most prolific users of in-house indices. The two firms have over $56 billion in ETF assets under management combined, indicating investors are not overly troubled with the firms’ self-indexing.

The methodology behind NLR’s new index is also used for popular Market Vectors ETFs including the Market Vectors Junior Gold Miners ETF (GDXJ) , the Market Vectors Oil Services ETF (OIH) , the Market Vectors Russia ETF(RSX) and the Market Vectors Vietnam ETF (VNM) .

NLR has $77.6 million in assets under management and is higher by 13% over the past year. The fund’s new index “employs constituent weighting caps that aim to help diversify the ETF among names in the global uranium and nuclear energy segment, while extensive liquidity screens are used to enhance the tradability of the ETF,” according to the statement.

Market Vectors Uranium+Nuclear Energy ETF

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ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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