VanEck Uranium ETF Beats iShares Clean Energy ETF Returns Past 5 Years

Clean energy has been on a strong run the past year as worldwide energy demand rises along with concerns over the supply and environmental impact of fossil fuels. The VanEck Uranium and Nuclear ETF (NYSEMKT:NLR) offers concentrated exposure to the nuclear supply chain with higher yields, while the iShares Global Clean Energy ETF (NASDAQ:ICLN) provides broader, lower-cost access to renewable energy utilities.

Investors looking to capitalize on the global transition toward carbon-free power often choose between broad renewable energy strategies and specialized sub-sectors. While both funds target the decarbonization of the power grid, they diverge significantly in their underlying technologies, cost structures, and historical risk-adjusted performance.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The iShares fund is the more affordable option for long-term holders with a 0.39% expense ratio. However, the VanEck fund may appeal to income-oriented investors, as it offers a higher payout with a trailing-12-month distribution yield of 2.70%.

Performance & risk comparison

What's inside

The VanEck Uranium and Nuclear ETF focuses exclusively on the nuclear energy sector, tracking a benchmark of companies engaged in uranium mining, reactor construction, and nuclear power generation. Launched in 2007, the fund maintains a concentrated portfolio of 29 holdings, primarily located in Energy (45%), Utilities (38%), and Industrials (15%). Its largest positions include Cameco Corp. (NYSE:CCJ) at 8.21%, Constellation Energy Corp. (NASDAQ:CEG) at 8.1%, and BWX Technologies Inc. (NYSE:BWXT) at 6.35%. The fund has a trailing-12-month dividend of $3.17 per share and provides direct exposure to the nuclear fuel cycle without specific ESG screening mandates.

In contrast, the iShares Global Clean Energy ETF offers a more diversified approach to sustainable energy, with a heavy emphasis on solar, wind, and hydrogen technologies. Launched in 2008, it holds 100 positions across Utilities (35%), Industrials (26%), and Energy (25%). Its largest positions include Nextpower Inc. (NASDAQ:NXT) at 10.1% Bloom Energy Corp. (NYSE:BE) at 9.4%, First Solar Inc. (NASDAQ:FSLR) at 6.13%. This fund utilizes an ESG screen to select its constituents and has a trailing-12-month dividend of $0.27 per share, reflecting its focus on growth-oriented renewable technology companies rather than resource extraction.

Which is the better buy?

There is no denying the iShares Global Clean Energy ETF is having quite the run, posting a 65% return the past 12 months, driven by an 82% year-to-date price gain. But renewable energy overall tends to have a boom-and-bust cycle, which is why ICLN posts a negative 4.13% five year return. This is because renewable energies like wind and solar are highly sensitive to rising interest rates, due to funding costs and the total return profile utilities see in major projects. The green energy sector has also been caught up in the tariff wars and heavily subsidized Chinese competitors who make it difficult for manufacturers in the U.S. and Europe to make money.

Nuclear is considered a clean energy source as well, but has been largely insulated from the volatility the rest of green energy sees. In the past, this was because for many years after the 2011 Fukushima earthquake that damaged nuclear facilities in Japan, policymakers worldwide shied away from the power source. But the need to address climate change with clean energy sources and the sudden surge in energy demand from AI have revived nuclear power. Also helping the sector is a new generation of smaller reactors that promise to provide reliable power on a smaller scale with quick construction times. All of this has benefited the VanEck Uranium and Nuclear ETF, which has an annualized five-year return of better than 22%.

The risk profile of its portfolio is generally less than the ICLN, because many of its holdings are utilities that operate nuclear fleets, like Constellation Energy Group, the largest operator of nuclear plants in the U.S. Also helping it be more predictable is the fact 67% of its portfolio consists of U.S. and Canada stocks, so they tend to operate in highly regulated, predictable markets.

For those seeking long-term appreciation while gaining exposure to the renewable energy trends, the VanEck Uranium and Nuclear ETF is the best bet, providing steady growth and a healthier annual dividend payout to boot.

For more guidance on ETF investing, check out the full guide at this link.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BWX Technologies, Bloom Energy, Cameco, Constellation Energy, First Solar, and Nextpower. The Motley Fool has a disclosure policy.