The ETF provides exposure to a basic industry driven by increasing populations and demand for alternative fuels, according to VanEck.
Specifically, MOO includes a 33% tilt toward materials, followed by 29.9% consumer staples, 22.9% industrials, 11.4% health care and 2.3% consumer discretionary. Top component holdings include names like Nutrien 8.5%, Deere & Co 8.3%, monsanto 7.7%, Zoetis 7.1% and Kubota 5.9%.
Supporting the positive commodity price performance, global growth among developed and emerging markets has been fueled by improved demand fundamentals. Furthermore, the weaker U.S. dollar has helped raise demand for USD-denominated commodities among international buyers – when the greenback depreciates against other global currencies, commodities tend to rise in U.S. dollar terms.
Furthermore, these resource-themed equity plays may help diversify a traditional portfolio as commodities are seen as an alternative to stocks and bonds.
For more information on the commodities space, visit our commodity ETFs category.