Granted, the operational benefits of currency declines is not something that materials-oriented companies can “take to the bank.” What’s more, further deterioration of global economic conditions might push commodity prices in a negatively reinforcing downward spiral, much the same way that industrial metals have been unable to get up off the mat. Then again, the recent surge in everything from natural gas to potash to precious metals may benefit the basic resources segment going forward.
Since the first week of January, I have had a number of moderate growth clients in iShares MSCI New Zealand (ENZL). The selection decision primarily came down to attractive fundamentals, the country’s projected gross domestic product (GDP) of 3.4% and the promise of yen/dollar carry traders “going long” on the New Zealand dollar. Still, New Zealand figures prominently in basic materials in much the same way that Australia does. In fact, New Zealand is the highest weighted country in the WisdomTree Commodity Country Equity Fund (CCXE).