In just under three years since their September of 2011 inception, Northern Trust’s “FlexShares” have seen two separate ETFs grow to over $3 billion and $2 billion in assets under management respectively.
The two products in focus here are GUNR (FlexShares Morningstar Global Upstream Natural Resources Index, Expense Ratio 0.48%) and TDTT (FlexShares iBoxx 3-Year Target Duration TIPS Index, Expense Ratio 0.20%) which may not be household names yet, but likely will be with most at some point in the near future thanks to their steady growth.
Year to date GUNR has pulled in more than $228 million in fresh new assets while TDTT has seen more than $214 million flow in. GUNR fits in the “Commodity Producers Equity” category and is actually the second largest fund now in this space behind the much better known but more narrowly based GDX (Market Vectors Gold Miners, Expense Ratio 0.53%) which has about $8.4 billion in assets under management.
We see not only exposure to Gold Mining stocks but to diversified global mining companies, names involved in agriculture/fertilizers, as well as diversified oil names even. Names that are represented in the top five holdings in the ETF are BHP Billiton, XOM, MON, Glencore, PLC, and Rio Tinto PLC. GUNR “only” averages about 124,000 shares traded daily, well below the 29.5 million share average of GDX, showing us that portfolio managers are largely using the product for longer term asset allocation reasons as opposed to shorter term trading.