Better Clean Energy ETF: VanEck's Nuclear-Focused NLR vs. the iShares ICLN Targeting Renewables
VanEck's uranium fund yields 3.1% but lost 28% last year, while iShares' renewable portfolio gained 8.3% with lower costs.
The VanEck Uranium and Nuclear ETF (NLR) and iShares Global Clean Energy ETF (ICLN) are two investment options that cater to investors interested in the clean energy sector. NLR focuses on the nuclear power chain, seeking higher yield and targeted exposure, while ICLN offers broader diversification across renewable electricity and equipment.
NLR boasts a higher dividend yield of 3.1% compared to ICLN's 1.1%, providing nearly 2.0 percentage points more return. However, it comes with a higher expense ratio of 0.86% versus ICLN's 0.38%. The former has 29 holdings, all concentrated in the nuclear power value chain, while the latter includes 105 companies focused on renewable energy and electrical equipment. ICLN screens out controversial firms, such as those involved in military contracting or fossil fuels.
Both ETFs have paid dividends over the past year, with NLR yielding 3.1% and ICLN at 1.1%. Despite the higher yield and outperformance over the past year, NLR's higher expense ratio and the capital-intensive, regulatory-sensitive nature of nuclear projects might make ICLN a more cost-effective choice for cost-conscious investors seeking diversification.
Ultimately, the decision between these two funds depends on individual investment goals, with NLR offering growth potential and higher income, while ICLN provides a more affordable and diversified approach to clean energy.
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