3 Alternative Energy ETFs That Are Crushing the Market This Year

Despite an 18% year-over-year decline in renewable energy investments during the first half of 2025 due to policy headwinds, the U.S. continues to see significant energy capacity growth from renewables. Notably, nuclear energy and clean hydrogen are emerging as particularly attractive sectors for investors, driven by surging demand from data centers and bipartisan political support. Three ETFs are highlighted for exposure: the Global X Uranium ETF (URA), up 87% YTD with $5.12 billion AUM; the VanEck Uranium+Nuclear Energy ETF (NLR), up 74% YTD with $3.62 billion AUM, offering broader nuclear exposure; and the Global X Hydrogen ETF (HYDR), a pure-play hydrogen fund up 104% YTD, despite its smaller $81 million AUM, capitalizing on projected explosive growth in clean hydrogen.

Analysis

Despite an 18% year-over-year decline in renewable energy investments during the first half of 2025, primarily due to policy headwinds like tax credit rollbacks and new restrictions, the U.S. continues to exhibit robust energy capacity growth in renewables, adding over 30 gigawatts year-to-date as of September. This indicates underlying resilience and demand within the sector, even as broader investment faces challenges.

Nuclear energy and clean hydrogen are emerging as particularly attractive sub-sectors, driven by surging demand from data centers and increasing bipartisan political support. The Global X Uranium ETF (URA) has capitalized on this trend, climbing 87% year-to-date with $5.12 billion in assets under management, reflecting expectations of reactor demand doubling by 2040. The VanEck Uranium+Nuclear Energy ETF (NLR), offering broader industry exposure, also posted strong results, up 74% year-to-date with $3.62 billion AUM.

The Global X Hydrogen ETF (HYDR), a pure-play fund, has delivered an impressive 104% year-to-date return, betting on a projected 28-fold increase in hydrogen production over the next five years. However, HYDR carries higher risk due to its smaller asset base ($81 million AUM) and concentrated portfolio, contrasting with the more established URA and NLR, which also feature relatively high expense ratios for their niche. These specialized ETFs provide targeted exposure to segments poised for significant growth despite broader renewable sector volatility.

Key Decisions for Investors

• Consider targeted exposure to nuclear and clean hydrogen sectors through specialized ETFs like URA, NLR, or HYDR, given their strong growth projections and increasing political support.
• Evaluate URA for concentrated uranium exposure or NLR for broader nuclear industry diversification, weighing their strong YTD performance against their relatively high expense ratios and portfolio concentration.
• Assess HYDR for high-growth, pure-play hydrogen exposure, acknowledging its higher risk profile due to smaller AUM and concentrated holdings, but significant YTD returns.
• Monitor ongoing policy developments, supply chain pressures, and tariff uncertainties, as these factors continue to influence the broader renewable energy landscape and could impact these specialized sectors.