Invest in Natural Resources with This Large Fund

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.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.