SPDR S&P Global Natural Resources ETF (ARCA: GNR)

Latest News for SPDR S&P Global Natural Resources ETF (ARCA:GNR)

SPDR S&P Global Natural Resources ETF

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An ETF Idea For Inflation, And TIPS Aren&#39;t Involved

Unearth This Materials ETF

Generac Holdings Inc

GENERAL DATACOM INDUS INC by General DataComm Industries, Inc.

General DataComm Industries Inc

GENERAL COPPER GOLD CORP by General Copper Gold Corp.

General Copper Gold Corp

THE GREENROSE HOLDING CO by The Greenrose Holding Company Inc.

The Greenrose Holding Co

The Greenrose Holding Co Units (1 Ord Share & 1 War)

The Greenrose Holding Co Warrants (28/02/2024)

GRAND RIVER COMMERCE INC by Grand River Commerce Inc.

Grand River Commerce Inc

When investors think of asset classes used for inflation protection, one of the primary destinations are Treasury Inflation Protection Securities (TIPS).
Indeed, data suggest investors have been putting money to work with TIPS and the relevant exchange-traded funds amid rising inflation data points, but there are some credible equity-based ideas to <a href="https://www.benzinga.com/trading-ideas/long-ideas/16/12/8778999/how-to-treat-tips-etfs-right-now">help investors fight inflation</a>.
<h3>Getting Into Inflation Without TIPS</h3>
The SPDR S&amp;P Global Natural Resources ETF (NYSE: <a class="ticker" href="/stock/gnr#NYSE">GNR</a>) is one equity-based idea that is also a credible inflation fighter. GNR, which tracks the S&amp;P Global Natural Resources Index, debuted in September 2010 and has nearly $1 billion in assets under management. Data suggest GNR&#39;s underlying index has performed well during periods of rising inflation.
&ldquo;Over the 14&ndash;year period ending Feb. 28, 2017, the <a href="https://spindices.com/indices/equity/sp-global-natural-resources-index">S&amp;P Global Natural Resources Index</a>, which is designed to provide market participants with an equity-based approach to natural resource investments through its three commodity-related sectors (agribusiness, energy, and metals &amp; mining), has outperformed the <a href="https://spindices.com/indices/equity/sp-global-bmi-us-dollar">S&amp;P Global BMI</a> by a monthly average of 36 bps in high-inflation months,&rdquo; said S&amp;P Dow Jones Indices <a href="http://www.indexologyblog.com/2017/04/28/natural-resources-a-potential-natural-play-on-higher-inflation-expectations/">in a recent note</a>.
<h3>Profiling GNR</h3>
GNR holds 106 stocks with over 93 percent, on a combined basis, hailing from the materials and energy sectors. While the materials sector has been a decent performer this year, GNR&#39;s energy exposure is holding the ETF back. With energy being the worst-performing sector in the S&amp;P 500 year-to-date, GNR is up a market-lagging 2.8 percent.
Five of GNR&#39;s top 10 holdings are major integrated oil stocks, including Exxon Mobil Corporation (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>), Total SA (ADR) (NYSE: <a class="ticker" href="/stock/tot#NYSE">TOT</a>) and BP Plc (ADR) (NYSE: <a class="ticker" href="/stock/bp#NYSE">BP</a>). As a reminder, GNR is a global ETF and U.S. stocks account for less than a third of the ETF&#39;s roster. Overall, 24 countries, including some emerging markets, are represented in GNR.
Not surprisingly, volatility is an issue with GNR. Over past three years, GNR&#39;s annualized volatility is 19.5 percent. Not only is that well above the S&amp;P 500, which is not surprising, but it is also above the broader materials sector. In GNR&#39;s defense, the ETF has been less volatile than the broader energy sector. Over those three years, GNR is down 10.5 percent while the S&amp;P 500 is higher by nearly 35 percent.
 Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/16/10/8575799/another-etf-avenue-for-fighting-inflation">Another ETF Avenue For Fighting Inflation</a>
<a href="https://www.benzinga.com/fintech/16/04/7789623/sec-tracking-unicorns-on-possible-valuation-inflation-in-silicon-valley">SEC Tracking Unicorns On Possible Valuation Inflation In Silicon Valley</a>

An ETF Idea For Inflation, And TIPS Aren't Involved

In what has been a banner year for the materials sector, plenty of the corresponding exchange-traded funds are delivering memorable performances. Somewhere between the solid showings offered by traditional materials ETFs and the spectacular returns offered by niche funds lies the SPDR Index Shares Fund (NYSE: <a class="ticker" href="/stock/gnr#NYSE">GNR</a>), which is up 30.3 percent year-to-date.
<h3>Digging GNR</h3>
GNR is not a small ETF &mdash; it has nearly $832 million in assets under management &mdash; but it does fly under the radar in the world of materials ETFs. GNR, tracks the S&amp;P Global Natural Resources Index, which offers exposure to materials and energy stocks, a familiar tactic among many <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8575799/another-etf-avenue-for-fighting-inflation">diversified natural resources ETFs</a>.
GNR can hold energy, agriculture, and metals and mining equities.
&ldquo;In order to better diversify the portfolio, the fund assigns equal weightings to each of the three sectors. This prevents it from tilting heavily toward energy stocks, which would receive larger representation in a market-cap-weighted portfolio,&rdquo; said <a href="http://news.morningstar.com/articlenet/article.aspx?id=784992">Morningstar in a recent note</a>.
Real assets should also be considered part of the inflation-fighting solution and that theme can be accessed with multiple ETFs, including GNR.
<h3>Valuation</h3>
Perhaps bolstering the case for energy stocks, is valuation. While the energy sector&#39;s price-to-earnings ratio is not overwhelmingly compelling by virtue of the group&#39;s contracting earnings, the sector&#39;s <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/02/6403572/this-sector-etf-is-a-value-proposition">price-to-book ratio</a> resides around multi-year lows. GNR allocates nearly 34 percent of its weight to the energy sector.
<h3>Holdings</h3>
Five of GNR&#39;s top 10 holdings are major integrated oil stocks, including Dow components Exxon Mobil Corporation (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) and Chevron Corporation (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>), the two largest U.S. oil companies.
&ldquo;Oil and U.S. natural gas prices have increased from depressed levels over the trailing 12 months through November 2016. Production growth in the United States, resulting from hydraulic fracturing, had previously flooded the market with supply, depressing prices. In response to weak prices, producers have reduced supply growth, while demand has strengthened. However, if prices increase, U.S. production could ramp up, limiting long-term price growth,&rdquo; added Morningstar.
Higher interest rates can benefit cyclical sectors, and as luck would have it, the Federal Reserve is targeting three interest rate hikes next year following one earlier this month. That could benefit GNR.
<h3>Geographic Exposure</h3>
U.S. stocks account for nearly 32 percent of GNR&#39;s lineup while the U.K. and Canada combine for about a quarter of the ETF&#39;s weight.
GNR &ldquo;caps each sector&#39;s U.S. and emerging-markets exposure at 40 percent and 15 percent, respectively, and limits individual holdings to 5 percent of the total portfolio,&rdquo; said Morningstar.

Seaport Global initiates coverage on SPDR S&amp;P Global Natural Resources ETF (AMEX: GNR) with a Buy rating and a $14.00 price target.

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Latest News for SPDR S&P Global Natural Resources ETF (ARCA:GNR)

Monday, May 01, 2017

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