Furthermore, IndexIQ argued that these commodities-linked equities may be a better way for investors to access commodity exposure as equities have proven to be a more efficient method than futures contracts to gain exposure.
Investors interested in the global natural resources space can take a look at broad ETF options, such as the IQ Global Resources ETF (NYSEArca: GRES).
GRES tries to reflect the performance of the IQ Global Resources Index, which uses momentum and valuation factors to identify global companies that operate in commodity-specific market segments and whose equity securities trade in developed markets, including the U.S. Sub-sector segments include the major commodity sectors, like precious metals, industrial metals, livestock, energy, and grains, food & fiber, along with timber, water and coal. The underlying index may also include short exposure to global equities as a partial equity market hedge.
“Traditional products may lack diversification and may not provide a well-balanced exposure to natural resources. GRES seeks to provide investors diversified access to 8 key areas of the global natural resources sector,” according to IndexIQ.
For more information on the markets, visit our sector ETFs category.