Navigating inflation with real assets

0

Real assets are a great way to augment a portfolio for better support during times of inflation.

The FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR) returned 7.47% month on month and 20.40% year-to-date, according to VettaFi.

The highly liquid fund has $8.8 billion in assets under management and charges an expense ratio of 46 basis points. GUNR recorded $974 million in net inflows year-to-date.

This fund is one of the more unique products in the commodity ETFdb category, as GUNR focuses on the “upstream” part of the natural resources supply chain, maintaining significant exposure the water and wood industries as well as positions in companies engaged in energy production. , metal mining and agriculture.

This product consists of many well-known stocks, including Exxon Mobil, Chevron Corporation, ConocoPhillips, and Tyson Foods. Although it offers some exposure to mid-cap stocks, it is heavily biased towards large and mega-cap stocks, including major oil companies and major mining companies.

With 112 individual constituents, GUNR offers relatively deep exposure to the global commodities sector. The fund offers exposure to North, Central and South America (54.12%), Europe (33.36%) and Asia-Pacific (12.52%). Within that, US equities make up 37.49% of the fund, followed by Canada and the UK at 12.82% and 12.71%, respectively, according to VettaFi.

GUNR may provide investors with “indirect” exposure to commodity prices because the profitability of the constituent stocks tends to move in unison with the spot prices of the underlying resources. According to VettaFI, this fund should perform well when natural resource prices are on the rise.

GUNR can be used in several different ways. Investors looking to add exposure to commodity-intensive stocks might find this fund a valuable addition to a long-term buy-and-hold portfolio. It can also be an effective way to establish more tactical short-term exposure to the commodities industry.

The fund is also suitable for dividend-seeking investors, as it offers an annual dividend yield of 3.09%.

For more news, insights and strategy, visit the Multi-asset channel.

Share.

Comments are closed.