The power of the atom was unleashed from a desire to develop a weapon that could end the most destructive war in human history. Although the creation of the atom bomb eventually spurred a nearly half-century arms race, it also offered a new means of power generation via nuclear energy. Despite nuclear power’s peacetime application, the occasional high-profile accident still engenders debate over whether the benefits of nuclear energy outweigh its risk.

One year ago, a huge earthquake caused a massive tsunami that triggered a nuclear crisis at Japan’s Fukushima Daiichi Nuclear Power Plant. The incident was the world’s worst nuclear accident since Chernobyl and has understandably renewed the debate about the safety of nuclear energy. Last May, Germany responded to the disaster with a plan to mothball its entire fleet of nuclear reactors by 2022. And China undertook an intensive safety review of its reactors.

At the time, I wrote that nuclear energy provided about a third of Germany’s electricity, so it would be an expensive proposition to find alternative sources of energy to meet demand. As I predicted, few steps have been taken toward actually shuttering the country’s nuclear reactors. The extent to which Germany will actually make progress toward weaning itself from nuclear power is an open question, especially since the country reportedly had difficulty meeting electricity demand this past winter when eight of its 17 nuclear power stations were idle.

Although the Chinese seem to be paying more attention to nuclear safety, the pace of reactor construction in the Middle Kingdom has hardly slowed. In fact, Chinese Premier Wen Jiabao recently said that his country will focus more intently on developing nuclear and hydroelectric power over the next few years than it will on developing alternative energy sources such as wind and solar power.

Despite all the controversy over nuclear energy in the post-Fukushima era, the number of nuclear reactors both planned and in operation hasn’t changed, holding steady at 987 according to industry data. In March 2011, there were 443 plants in operation and since then that number has fallen by just eight due to Germany’s aforementioned shutdown of some of its reactors. Meanwhile, the number of new nuclear facilities in the planning stages around the world has risen from 482 to 491 since the disaster.

Clearly nuclear operators and regulators still see value in nuclear energy, so the challenge facing the nuclear power industry involves perception more than policy.

That fact will become increasingly clear as the global economy continues to grow this year, notwithstanding the troubles in Europe. With the emerging markets still firmly in growth mode–yes, even China–they’ll need the relative affordability of nuclear power to meet their nations’ electricity demand, particularly if oil prices remain elevated. While the upfront costs of building a reactor can be high, over its lifetime a nuclear reactor can produce electricity more reliably than a fossil fuel-driven power station, while having less exposure to fluctuating commodity prices.

Additionally, a number of infrastructure companies have made great strides toward developing smaller, safer modular reactors such as the Westinghouse SMR, which can be installed at a fraction of the cost of a traditional reactor. This new breed of reactor is so small that it can be delivered by road or rail with little onsite assembly required.

Given the dynamics at play in the nuclear power industry, it’s little surprise that there’s been a lot of interest in uranium miners lately. Late last year, Rio Tinto (NYSE: RIO) and Cameco Corp (NYSE: CCJ) had a bidding war over the junior Canadian uranium miner Hathor Exploration, with Rio Tinto the ultimate winner. Both companies were betting on a recovery in uranium demand that would be driven by the continued development of nuclear energy.

So while there are still concerns about nuclear energy, it’s way too soon to count it out, particularly until other forms of alternative energy become more cost effective. Given the volatility of the space, however, investors in nuclear energy should definitely have a long-term horizon.

What’s New

Market Vectors Indonesia Small-Cap ETF (NYSE: IDXJ) launched last week, complementing the existing Market Vectors Indonesia ETF (NYSE: IDX). The fund tracks small-cap companies based in Indonesia or that generate at least 50 percent of their revenue in the country.

For the better part of the last decade, Indonesia has produced steady gross domestic product (GDP) growth of between 6 percent and 8 percent as the result of burgeoning domestic consumption, which accounts for about 70 percent of the nation’s GDP. That growth, along with plentiful natural resources, has attracted strong inflows from foreign funds.

Indonesia is enjoying growing wealth, with per capita income expected to reach $17,895 by 2030 from a current level of about $3,500. Demographically speaking, Indonesia has a relatively young population with a median age of 28.2 years. Small-cap Indonesian stocks are an attractive proposition for investors because they offer solid exposure to the country’s domestic growth story without significant exposure to global economic headwinds.

The fund’s portfolio is comprised of 27 stocks with an average market cap of about $700 million. Financials are weighted at about 40 percent of the portfolio, followed by industrials at 18 percent and energy at 16 percent. Consumer staples and consumer discretionary names are weighted at 15.5 percent of assets and 5.3 percent of assets, respectively. The fund charges a 0.61 percent annual expense ratio.

Portfolio Roundup

As I wrote earlier, the nuclear power industry has had a rough year in the wake of the Fukushima Daiichi disaster. Nuclear power was starting to enjoy broader acceptance, even among environmentalists, but the accident in Japan was of sufficient scale to generate a massive backlash against the industry.

Still, the economics of nuclear energy remain compelling, especially since global power demand is on the rise. And while much of nuclear power’s growth story is centered in the emerging markets, there’s a renewed interest in nuclear power in the US. Just last year, the US Department of Energy broke it’s almost 30-year informal moratorium on nuclear power projects by making loan guarantees on a number of new projects. It pledged more than $8 billion for the construction of two new reactors by Southern Company (NYSE: SO) and $2 billion for Areva (OTC: ARVCF) to construct an enrichment facility in the Midwest.

As a result, we continue to believe that Market Vectors Nuclear Energy (NYSE: NLR) remains an attractive long-term opportunity. The fund’s portfolio encompasses the nuclear industry’s full value chain from uranium mining to reactor operators.

Continue buying Market Vectors Nuclear Energy under 30.