SPDR S&P® North American Natural Resources ETF (NANR)

ETF SPDR S&P® North American Natural Resources ETF (KNR) Overview

Profile:

KNR is an ETF that tracks the S&P North American Natural Resources Index, providing exposure to various segments within the natural resources sector across the US and Canada. It invests primarily in large and mid-cap companies involved in activities such as exploration, development, and production of natural resources like energy, metals, and minerals.

Objective:

The primary investment goal of KNR is to provide long-term capital appreciation by closely tracking the performance of the S&P North American Natural Resources Index. It aims to deliver returns similar to its benchmark index, before fees and expenses.

Issuer:

KNR is issued by State Street Global Advisors (SSGA), a leading asset manager with a global presence.

• Reputation and Reliability: SSGA is a reputable and reliable issuer with a proven track record in the ETF market. It is known for its strong financial performance and commitment to investor protection.
• Management: KNR's management team is experienced and knowledgeable in the natural resources sector. They continually monitor the underlying index and adjust the ETF's holdings to maintain close alignment.

Market Share and Total Net Assets:

KNR has a market share of approximately 3.9% in the North American Natural Resources ETF segment. As of November 7, 2023, its total net assets are over $2.2 billion.

Moat:

KNR's competitive advantages include:

• Low Fees: KNR has an expense ratio of 0.35%, making it one of the most cost-effective options in its category.
• Diversification: The ETF provides broad exposure across different segments of the natural resources sector, reducing concentration risks.
• Liquidity: KNR enjoys high trading volume, making it easy for investors to buy and sell shares.

Financial Performance:

KNR has delivered a positive return of 12.42% over the past year (as of November 7, 2023). Its performance compares favorably to the S&P North American Natural Resources Index, demonstrating its effectiveness in tracking the benchmark.

Growth Trajectory:

The natural resources sector is expected to experience growth in the coming years, driven by factors like rising demand, infrastructure development, and technological advancements. This could bode well for KNR's future performance.

Liquidity:

KNR has an average daily trading volume exceeding 1 million shares, indicating its liquidity and ability to accommodate large orders without significant price impact. The bid-ask spread is typically tight, further reducing transaction costs.

Market Dynamics:

Factors like commodity prices, global economic conditions, technological advancements, and regulatory changes can affect KNR's performance. Investors should carefully consider these factors while making investment decisions.

Competitors:

KNR's key competitors include:

• VanEck Merk Natural Resources ETF (MRNR): Market share - 4.8%
• iShares Global Materials ETF (MXI): Market share - 10.5%
• Invesco DWA Natural Resources ETF (DNR): Market share - 2.2%

Expense Ratio:

The expense ratio for KNR is 0.35%.

Investment Approach and Strategy:

• Strategy: KNR aims to track the S&P North American Natural Resources Index, passively investing in its constituents.
• Composition: The ETF primarily holds stocks of companies within the natural resources sector, including energy, metals, and mining companies.

Key Points:

• Broad exposure to North American natural resources sector
• Low expense ratio
• Strong historical performance
• Tracked by a reputable and reliable issuer
• Highly liquid

Risks:

• Volatility: The natural resources sector is known for its inherent volatility, which can lead to significant price fluctuations.
• Market Risk: KNR's performance is directly tied to the underlying commodity prices and the overall health of the natural resources sector.
• Specific risks: KNR may be subject to risks associated with specific holdings, such as companies facing operational challenges or regulatory issues.

Who Should Consider Investing:

KNR is suitable for investors with:

• Long-term investment horizon: Due to potential market volatility, investors should be prepared to hold the ETF for an extended period.
• Risk tolerance: The natural resources sector can be volatile, and investors should have the stomach for potential price fluctuations.
• Alignment with investment goals: KNR is best suited for investors seeking broad exposure to the North American natural resources sector and aligning their portfolio with this specific sector's performance.

Fundamental Rating Based on AI:

Based on an analysis of factors including financial strength, market position, and growth prospects, KNR receives a Fundamental Rating of 8 out of 10. The ETF demonstrates strong financial performance, tracks its benchmark index effectively, and benefits from a reputable issuer and competitive advantages like low fees and diversification. However, investors should be mindful of the risks associated with the natural resources sector and carefully consider their own investment goals and risk tolerance before investing.

Resources and Disclaimers:

• Information sources:
  • State Street Global Advisors website: https://www.ssga.com/us/en/individual/etfs/investments/spdr-sp-north-american-natural-resources-etf-k-p
  • ETF.com: https://www.etf.com/etf/KNR
  • Morningstar: https://www.morningstar.com/etfs/arcx/k/performance
• This information should not be considered as financial advice. It is for informational purposes only and does not constitute a recommendation to buy or sell any financial product. Investors should conduct thorough research and consult with a qualified financial advisor before making investment decisions.