Natural Resources from The Deep Woods

09/14/2018 5:00 am EST

Focus: ETFS

Jim Woods

Editor, Successful Investing and Intelligence Report

SPDR S&P Global Natural Resources ETF (GNR) seeks to provide exposure to a number of the largest market cap securities in three natural resources sectors — agriculture, energy and mining & metals, explains Jim Woods, ETF expert and editor of The Deep Woods.

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. This fund divides its $1.62 billion in total assets roughly equally in each of the three sectors.

From a technical perspective, Global Natural Resources 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, Global Natural Resources 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, it 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.

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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 (BHP), 5.08%; Nutrien (NTR), 4.60%; ExxonMobil Corporation (XOM), 4.06%; Total SA (TOT), 4.03%; and Royal Dutch Shell Plc Class A (RDS.A), 3.66%.

Investors interested in the natural resources niche can do their diligence on SPDR S&P Global Natural Resources ETF to see whether it is a suitable fit for their portfolios.

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