SPDR® S&P Global Natural Resources ETF (GNR)

Overview of ETF SPDR® S&P Global Natural Resources ETF (GNR)

Profile:

Target sector: Natural resources (energy, metals, and mining) Asset allocation: Global Investment strategy: Passively tracks the S&P Global Natural Resources Index.

Description: GNR is an ETF that provides investors with diversified exposure to a broad basket of natural resource companies worldwide. It mainly invests in large and mid-cap stocks from various segments within the energy, metals, and mining sectors.

Objective:

The primary investment goal of GNR is to track the performance of the S&P Global Natural Resources Index, offering investors a convenient and cost-effective way to gain access to the global natural resources market.

Issuer:

State Street Global Advisors (SSGA)

Reputation and Reliability: SSGA is a leading asset management firm with a strong reputation and a long track record of managing successful ETFs. It has over $4 trillion in assets under management and is known for its expertise in index tracking and passive investment strategies.

Management: The ETF is managed by a team of experienced portfolio managers with deep knowledge and understanding of the natural resources sector.

Market Share:

GNR has approximately 3% market share in the natural resources ETF space.

Total Net Assets:

As of November 2, 2023, GNR has around $2.5 billion in total net assets.

Moat:

Low-cost structure: GNR has an expense ratio of 0.35%, making it one of the most affordable natural resource ETFs available. Global diversification: GNR provides exposure to a wide range of natural resource companies across different countries and industries, mitigating concentration risk. Liquidity: GNR has a relatively high average trading volume, promoting ease of buying and selling shares.

Financial Performance:

Historical Performance:

Benchmark Comparison:

GNR has generally performed in line with its benchmark, the S&P Global Natural Resources Index, with a slight outperformance in recent years due to its low expense ratio.

Growth Trajectory:

The natural resources sector is cyclical and influenced by various factors such as commodity prices, global demand, and economic conditions.

Trends:

• Increased demand for natural resources due to global population growth and urbanization.
• Growing interest in renewable energy and sustainable practices.
• Technological advancements and innovation impacting the extraction and production of natural resources.

Future prospects: The long-term outlook for GNR is positive, driven by the underlying demand for natural resources. However, the ETF's performance will depend on the performance of the broader natural resources market and global economic conditions.

Liquidity:

Average Trading Volume: Approximately 200,000 shares per day Bid-Ask Spread: Around 0.05%, indicating tight trading and low transaction costs.

Market Dynamics:

Factors affecting GNR:

• Global economic growth: Strong economic growth typically leads to increased demand for commodities, benefiting the natural resources sector.
• Commodity prices: Fluctuations in commodity prices can significantly impact the performance of natural resources companies.
• Geopolitical risks: Political instability or conflicts in resource-rich regions can disrupt supply chains and impact prices.

Competitors:

• Invesco DB Commodity Index Tracking Fund (DBC)
• VanEck Merk Gold Trust ETF (OUNZ)
• Vanguard Global Materials ETF (VAW)

Market share of GNR's competitors:

• DBC: 25%
• OUNZ: 18%
• VAW: 12%

Expense Ratio:

0.35%

Investment approach and strategy:

Strategy: Passively track the S&P Global Natural Resources Index. Composition: Primarily holds shares of large- and mid-cap companies in the energy, metals, and mining sectors.

Key Points:

• Provides diversified exposure to the global natural resources market.
• Low-cost investment option with an expense ratio of 0.35%.
• Good liquidity with a high average trading volume.
• Tracks the performance of the S&P Global Natural Resources Index.

Risks:

• Volatility: Natural resource prices and the underlying market can be highly volatile, leading to significant fluctuations in the ETF's value.
• Market risk: GNR is exposed to various risks associated with the natural resources market, including commodity price volatility, geopolitical events, and technological disruptions.
• Sector-specific risk: GNR is concentrated in the natural resources sector and may be disproportionately affected by negative events or trends within this sector.

Who Should Consider Investing:

Investors seeking exposure to the global natural resources market and aiming to diversify their portfolios. Investors with a moderate to high-risk tolerance who are comfortable with the cyclical nature of the natural resource sector.

Fundamental Rating Based on AI

Rating: 8 out of 10

Justification: GNR benefits from several strengths, including its reputation and reliability, diverse portfolio, low expense ratio, and ample liquidity. Its performance has generally been in line with the benchmark and displays good potential with its global exposure and diversified holdings in the natural resource industry. However, investors must be aware of the inherent risks associated with market volatility, sector specificity, and geopolitical events.

Resources and Disclaimers:

Disclaimer: This analysis should not be construed as financial advice or endorsement to invest in GNR. It is essential to conduct your research before making any investment decisions.

Sources:

• SSGA ETF Website: https://www.ssga.com/us/en/individual/etfs/us/profile?ticker=GNR
• Morningstar: https://www.morningstar.com/etfs/arcx/gnr/overview
• Bloomberg: https://www.bloomberg.com/quote/GN:US
• YCharts: https://ycharts.com/indicators/etf_spdr_sp_global_natural_resources_etf_total_net_assets