“Investors in this fund are not only betting on high commodity prices but also that the fund’s holdings would be able to keep their costs down,” Bryan added. “Therefore, its performance will not directly correlate with that of commodity prices.”
GNR also provides a cheaper alternative to investing in the futures market and commodity-related ETFs. For instance, GNR provides exposure to equity risk premium, a low 0.40% expense ratio and a 2.19% 12-month yield.
Additionally, the natural resource ETF is relatively cheap compared to the broader market, trading at a 14.0 price-to-earnings ratio and a 1.5 price-to-book. In comparison, the S&P 500 index shows a 17.5 P/E and a 2.4 P/B.
For more information on international markets, visit our global ETFs category.
Max Chen contributed to this article.