Today, we begin a series of exchange-traded funds (ETFs) with a focus on natural resources.
The first of those funds is the SPDR S&P Global Natural Resources ETF (GNR), which seeks to provide exposure to a number of the largest market cap securities in three natural resources sectors – agriculture, energy and metals and mining. GNR divides its $1.62 billion in total assets roughly equally in each of the three sectors.
We previously have covered ETFs that offer investors exposure to commodities through futures that feature potentially attractive returns. However, that approach has its disadvantages as well, including the lack of dividends, heighted volatility and large expense ratios.
From a technical perspective, GNR is one of the cheapest vehicles for exposure to global natural resources. The fund has an expense ratio of just 0.40% and has an average daily trading volume of $5.25 million, which is sufficient for most investors to get in and out of holding the fund as they wish.
According to ETFChannel.com, for the week ending on Aug. 31, GNR experienced a $64.2 million inflow, a 4.2% increase week over week, indicating that more institutional investors have recently been adding GNR to their portfolios.
GNR’s one-year return was a market-beating 18.07%. Year to date, GNR has returned 4.35%. In addition, the fund boasts a dividend yield of 2.54%. The consensus 3-5 year earnings per share (EPS) growth estimate is 12%, which is an aggregated analysis result from firms such as FactSet and Reuters.
Chart courtesy of Stockcharts.com
For the top country exposures, GNR is 30.53% allocated to the United States, 15.19% to the United Kingdom, 10.73% to Canada, 10.62% to Australia and 5.30% to France.
GNR’s top holdings are BHP Billiton Limited, 5.08%; Nutrien, 4.60%; ExxonMobil Corporation, 4.06%; Total SA, 4.03%; and Royal Dutch Shell Plc Class A, 3.66%.
Investors interested in the natural resources niche can do their diligence on SPDR S&P Global Natural Resources ETF (GNR) to see whether it is a suitable fit for their portfolios.