We have not recently covered the “Timber” category in ETF land that falls within the broader category of Materials, and then furthermore under Commodity Producer Equities, but the space has two good sized ETFs representing it currently that occasionally see some play.
WOOD (iShares S&P Global Timber & Forestry, Expense Ratio 0.47%) is the larger of the two alternatives here, with approximately $289 million in assets under management.
The fund invests in thirty six individual equities that operate in the timber and forestry industry, with top four holdings rounding out as follows: PCL (8.27%), WFT (8.11%), WY (8.05%), and RYN (6.91%). PCL, WY, and RYN are technically “REITs” that operate within the timber and forestry industry, while WFT for example is classified as “Paper and Forest Products.”
CUT (Guggenheim Timber, Expense Ratio 0.70%) debuted earlier than WOOD in 2007 instead of 2008 respectively, but has since lost its edge in assets under management comparatively, as the fund currently has about $191 million.
We see twenty eight individual names in the underlying CUT basket, with a mix of U.S. listed equities as well as a handful of ordinary shares listed internationally. Top holdings at the moment are MWV (4.95%), UPM-Kymmene Oyj (4.79%), Oji Holdings Corp. (4.79%), Mondi Ltd. (4.78%), and Smurfit Kappa Group PLC (4.71%).
Neither of these funds trades heavy daily volume typically as WOOD averages about 19,000 shares traded daily while CUT’s ADV is about 44,000 shares. However, based on the respectable asset levels in these funds, it is
evident that investors are using these funds as niche “buy and hold” allocation type strategies.
iShares Global Timber & Forestry ETF
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com
Street One Financial is an educational/research firm utilizing the Broker Dealer services of Precision Securities, a FINRA registered Broker/Dealer.