Norilsk Nickel: World’s Largest Producer of Nickel & Palladium
While uses for nickel and palladium might not readily come to mind, many of us are familiar with stainless steel (nickel is an important ingredient) and automobiles (palladium serves an important pollution-reduction function in car exhaust systems). Norilsk Nickel claims to be the world’s largest producer of these metals.4 Additionally, year-to-date5:
• Nickel is up nearly 40%
• Palladium is up more than 20%
• The S&P GSCI, a broad measure of commodity prices, is up only 2%
While the price behavior of these metals is certainly important for Norilsk Nickel, their divergence from a broader measure of commodity price behavior makes it all the more interesting.
Index Screening Date: September 30, 2014
The most important feature of WisdomTree’s fundamentally weighted equity Indexes is the fact that they rebalance annually. To remain in Dividend Growers, Norilsk Nickel must prove itself annually on measures of growth and quality. To remain in Dividend Yielders, Norilsk Nickel must maintain a high dividend yield. If included, weighting is then based on Norilsk Nickel’s cash dividends. Until this annual Index Screening, we hope that Norilsk Nickel can continue to be a beacon of positive performance in an otherwise difficult Russian equity landscape.
1Refers to the performance of the MSCI Russia Index from 12/31/13 to 7/25/14.
2As of 7/25/2014, Norilsk Nickel was a 0.45% weight in the WisdomTree Global Equity Income Index, a 3.65% weight in the WisdomTree Global Natural Resources Index, a 3.32% weight in the WisdomTree Global ex-U.S. Dividend Growth Index, a 1.64% weight in the WisdomTree Commodity Country Equity Index, a 3.08% weight in the WisdomTree Emerging Markets Equity Income Index and a 6.21% weight in the WisdomTree Emerging Markets Dividend Growth Index.
3“Templeton Invest Fund Cuts Stakes in Russia’s Sberbank, LUKoil, Alrosa,” The Moscow Times, May 29, 2014.
4Source: Norilsk Nickel company website, as of July 2014.
5Source: Bloomberg, with performance measured from 12/31/13 to 7/25/14.
Important Risks Related to this Article
Investments focused in Russia are increasing the impact of events and developments associated with the region, which can adversely affect performance. Dividends are not guaranteed and a company’s future ability to pay dividends may be limited. A company currently paying dividends may cease paying dividends at any time.