Hedging inflation has been a common theme in the capital markets these days. One strategy is to aim for commodities exposure with assets like the IQ Global Resources ETF (GRES).

Per the fund description, GRES seeks investment results that track, before fees and expenses, the price and yield performance of the IQ Global Resources Index. The IQ Global Resources Index 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 United States.

These segments include livestock; precious metals; grains, food, and fiber; energy; industrial metals; timber; water; and coal. The Index also includes short exposure to global equities as a partial equity market hedge.

“GRES gives investors unique exposure to global companies that operate in commodity-specific market segments,” an ETF Database analysis said. “The fund uses momentum and valuation factors to identify trends in equities within the livestock, grains, metals, and energy sectors. GRES holds only securities that trade in developed markets, and the fund also includes short exposure to global equities as a partial equity market hedge.”

Highlights of GRES:

  1. Innovative Commodity Investing: Access global commodity exposure through equities, without the inefficiencies of futures contracts.
  2. Risk Management: Offers a partial equity market hedge through a short exposure to global equities.
  3. Broad Diversification: Consists of eight natural resources categories and dynamically adjusts to changing market environments to avoid concentration risk.
  4. Noteworthy Performance: The fund is up about 16% year-to-date.

GRES Chart

Billionaire Hedge Fund Manager Gives Thumbs Up

Billionaire hedge fund manager Paul Tudor Jones elucidated an appetite for commodities, according to a Kitco News article. The Fed’s argument supporting transitory inflation doesn’t compute for Jones.

“If Fed treats [inflation numbers], which were material events, with nonchalance, then it’s just a green light to bet heavily on every inflation trade. The idea that inflation is transitory, it doesn’t work the way I see the world,” Jones told CNBC. “I would be really concerned about arguing that inflation is transitory when we have inventories at a record low, we have demand screaming, and we have people who are really underinvested where they should be given the valuations of variety of financial assets.”

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