Better Clean Energy ETF: VanEck's Nuclear-Focused NLR vs. the iShares ICLN Targeting Renewables

The VanEck Uranium and Nuclear ETF (NYSEMKT:NLR) offers targeted exposure to the nuclear power chain with a higher yield, while the iShares Global Clean Energy ETF (NASDAQ:ICLN) provides lower-cost, broad diversification across renewable electricity and equipment.

Energy investors often choose between different paths toward global decarbonization. While some prefer the growth potential of solar and wind, others look to the steady, carbon-free baseload power provided by nuclear energy. Comparing these two funds reveals significant differences in their portfolio concentration, expense structures, and historical risk profiles, providing a clearer view of how each might fit into a long-term investment strategy.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). 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 more affordable for cost-conscious investors, featuring a 0.38% expense ratio that is 14 basis points lower than its peer. However, the VanEck fund may appeal to income-oriented investors; its 3.1% yield provides a higher payout than the 1.1% distribution offered by the iShares portfolio, representing a yield gap of nearly 2.0 percentage points.

Performance & risk comparison

What's inside

The VanEck Uranium and Nuclear ETF concentrates its 29 holdings within the nuclear power value chain, focusing heavily on energy, utility, and industrial companies. Its portfolio includes uranium miners and nuclear-focused utilities, with top holdings such as Constellation Energy (NASDAQ:CEG) at 9.20%, Cameco (NYSE:CCJ) at 8.23%, and Public Service Enterprise Group (NYSE:PEG) at 8.21%. It was launched in 2007, and has paid $3.17 per share over the trailing 12 months, which on its recent ~$103.4 share price works out to a 3.1% yield.

The iShares Global Clean Energy ETF provides much broader diversification with 105 holdings involved in renewable electricity and electrical equipment. It filters its portfolio with an ESG screen and focuses on solar, wind, and other sustainable power solutions. Its largest positions include Bloom Energy (NYSE:BE) at 9.70% and First Solar (NASDAQ:FSLR) at 6.97%. It was launched in 2008, and has paid $0.18 per share over the trailing 12 months, which on its recent ~$17.3 share price works out to a 1.1% yield.

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Which looks like the better buy

Those seeking to invest in the clean energy movement have the opportunity to gain exposure to a range of companies in this arena through the VanEck Uranium and Nuclear ETF (NLR) and iShares Global Clean Energy ETF (ICLN). Now is a good time to buy, because the artificial intelligence boom has created strong demand for energy that does not rely on fossil fuels among the tech companies funding the global AI infrastructure buildout. Choosing between these two funds depends on the factors that matter most to you.

NLR has historically outperformed ICLN and offers a larger dividend. It gives you exposure to the entire nuclear supply chain from uranium mining to reactor operation. However, it sports a higher expense ratio, and nuclear projects are capital-intensive, slow-building, and sensitive to interest rates and regulatory hurdles.

ICLN delivers superior diversification with over 100 holdings compared to NLR's scant 29 stocks. It also screens to weed out companies connected to military contracting, tobacco, shale energy and other such factors. While it has delivered a lower total return over five years, the fund significantly outperformed NLR over the past year, which suggests the boon promised by AI could be starting to play out.

Robert Izquierdo has positions in First Solar. The Motley Fool has positions in and recommends Bloom Energy, Cameco, Constellation Energy, and First Solar. The Motley Fool has a disclosure policy.