Commodities themselves have clearly been in play for much of 2014, which brings us to related “Commodity Producer” based ETFs.
The largest in the space is the well covered GDX (Market Vectors Gold Miners, Expense Ratio 0.52%) which trades a massive 36 million shares daily on average and has about $4.9 billion in assets under management after solid 1Q performance thus far in 2014. MOO (Market Vectors Agribusiness, Expense Ratio 0.53%) is the second largest in the space with about $3.5 billion in assets under management and this fund has seen substantial activity in recent days as we approach earnings season.
MOO has lost about $300 million in assets via redemption activity in this week, and as we look at top holdings in the ETF MON (7.93%, 4/2/14), SYT (7.52%, 4/23/14), DE (6.87%, 5/14/14), POT (6.47%, 4/24/14), and ADM (6.31%, 5/1/14), we can see that earnings season is on the horizon for these names.
A fast mover in this space that deserves a highlight is GUNR (FlexShares Morningstar Global Upstream Natural Resources, Expense Ratio 0.48%) which debuted in September of 2011 but has already raised $2.79 billion in assets under management, while averaging only about 226,000 shares daily (an indication of perhaps sticky assets).
Top holdings in GUNR include Diversified Mining companies, Integrated Oil names, as well as Agriculture/Fertilizer companies for example, as weightings currently look like this: BHP Billiton Ltd. (4.96%), XOM (4.84%), and MON (4.70%) for example.
Two other very prominent funds in this space in terms of their asset growth are IGE (iShares S&P GSSI Natural Resources, Expense Ratio 0.48%) and GDXJ (Market Vectors Junior Gold Miners, Expense Ratio 0.54%) which now have an impressive $2.1 billion and $2.08 billion in assets under management each respectively.
There are a total of thirty four long only, unlevered funds in this space, with niches such as Platinum Miners, Silver Miners, Timber & Foresty, Uranium, and Rare Earth Metals all represented in ETF form, so there have been significant developments in the past three years in terms of ways to invest in names specific to commodity production outside of the top tier “benchmark” names in the category.
FlexShares Morningstar Global Upstream Natural Resources Index Fund
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.
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