A Fast Start And Good Timing For This New ETF

Just eight exchange-traded funds made all-time highs Thursday, and several of those are funds that have only been around a few months. Standard advice would be to not get too excited about an ETF that is just a few months old hitting an all-time high, but the SPDR S&P North American Natural Resources ETF NANR is worth examining.

Still nearly two weeks shy of its three-month anniversary, NANR is easily one of the quietest success stories among the more than 280 exchange-traded products that debuted in the United States last year. The reality is the ETF industry is increasingly competitive and it is not everyday rookie funds achieve what NANR has in fewer than 90 days. That achievement is a staggering $786.5 million in assets under management.

Related Link: Secrets To This ETF's Success

Making NANR's success all the more remarkable is that the new allocates over 95 percent of its combined weight to the materials and energy sectors, two of last year's worst-performing groups.

Going Bananas For NANR

“NANR is designed to meet demand for natural resources equity exposure by providing access to companies in the energy, materials and agriculture industries. NANR provides investors with an approach that weights the sub-sectors of the portfolio 45 percent energy, 35 percent materials and 20 percent agriculture stocks,” according to a statement from State Street Global Advisors (SSgA).

The SPDR S&P North American Natural Resources ETF follows the S&P BMI North American Natural Resources Index, which is a subset of the S&P Global Large MidCap Commodity and Natural Resources Index, according to SSgA.

While the Energy Select Sector SPDR (ETF) XLE and the Materials Select Sector SPDR XLB, two ETFs with plenty of holdings also residing in NANR, have risen since late last year, those funds have been unable to compete with NANR.

XLE and XLB are up an average of about 2 percent since NANR debuted while the resources ETF is higher by a staggering 13.2 percent.

Perhaps bolstering the case for energy ETFs, such as XLE, is valuation. While the energy sector's price-to-earnings ratio is not overwhelmingly compelling by virtue of the group's contracting earnings, the sector's price-to-book ratio resides around multi-year lows.

XLE and XLB holdings that are also found in NANR include Exxon Mobil Corporation XOM, Chevron Corporation CVX and Monsanto Company MON. NANR holds 61 stocks with a weighted average market value of $63.7 billion.