Xtrackers RREEF Global Natural Resources ETF (NRES)

ETF Xtrackers RREEF Global Natural Resources ETF Summary

Profile

The Xtrackers RREEF Global Natural Resources ETF (DNR) is a passively managed exchange-traded fund that tracks the performance of the Solactive Natural Resources Equity Index. This index is designed to represent the global natural resources equity universe, encompassing companies across all sectors of the natural resources industry, including energy, metals & mining, and agriculture.

Objective

The primary investment goal of DNR is to provide investors with exposure to the global natural resources sector through a diversified portfolio of equities. This allows investors to potentially benefit from the long-term growth potential of the natural resources industry.

Issuer

DWS (formerly known as Deutsche Asset Management) is the issuer of DNR. DWS is a global asset management firm with a strong reputation and track record in the market. The firm manages over $800 billion in assets for institutional and retail clients worldwide.

Reputation and Reliability:

• DWS has a strong reputation in the asset management industry, with a long history of providing investment solutions for clients.
• The firm is known for its commitment to responsible investing and its focus on sustainable practices.
• DWS is a member of the UN PRI (Principles for Responsible Investment) and is committed to integrating ESG (Environmental, Social, and Governance) factors into its investment processes.

Management:

• The DNR ETF is managed by a team of experienced investment professionals at DWS.
• The team has a deep understanding of the natural resources industry and a proven track record of managing index-tracking funds.

Market Share

DNR has a relatively small market share in the global natural resources ETF space, with approximately 0.3% of the total assets under management. However, it is the largest ETF in the DWS natural resources ETF lineup.

Total Net Assets

As of November 3, 2023, DNR has approximately $290 million in total net assets.

Moat

Competitive Advantages:

• Global Diversification: DNR provides investors with a broad exposure to the global natural resources sector, avoiding concentration risk.
• Passive Management: The passive management approach allows for a low expense ratio and a high degree of transparency.
• Liquidity: DNR trades on the NYSE Arca exchange with an average daily trading volume of over 200,000 shares, ensuring good liquidity for investors.

Financial Performance

Historical Performance:

• DNR has historically delivered strong returns, outperforming its benchmark index over various timeframes.
• However, the ETF has also experienced periods of volatility, reflecting the cyclical nature of the natural resources sector.

Benchmark Comparison:

• DNR has outperformed its benchmark index, the Solactive Natural Resources Equity Index, over the past 1, 3, and 5 years.
• This outperformance can be attributed to the ETF's active management and its focus on selecting high-quality companies within the natural resources sector.

Growth Trajectory:

• The long-term outlook for the natural resources sector remains positive, driven by increasing demand from emerging economies and the growing need for sustainable resource management.
• DNR is well-positioned to benefit from this long-term growth potential.

Liquidity

Average Trading Volume:

• DNR has an average daily trading volume of over 200,000 shares, indicating good liquidity and ease of trading for investors.

Bid-Ask Spread:

• The typical bid-ask spread for DNR is around 0.05%, which is relatively low compared to other natural resources ETFs.

Market Dynamics

Factors Affecting the Market:

• Global Economic Growth: Strong economic growth in emerging markets can drive demand for natural resources.
• Commodity Prices: Fluctuations in commodity prices can significantly impact the performance of natural resources companies.
• Government Regulations: Changes in government regulations affecting the natural resources industry can impact the sector's performance.

Competitors

Key competitors of DNR include:

• Invesco DB Commodity Index Tracking Fund (DBC): 40% market share
• SPDR S&P Global Natural Resources ETF (GNR): 30% market share
• iShares Global Materials ETF (MXI): 20% market share

Expense Ratio

The expense ratio for DNR is 0.65%, which is relatively low compared to other natural resources ETFs.

Investment Approach and Strategy

Strategy: DNR passively tracks the Solactive Natural Resources Equity Index, aiming to closely replicate its performance.

Composition: The ETF invests in a diversified portfolio of equities across various natural resources sectors, including energy, metals & mining, and agriculture.

Key Points

• DNR provides investors with diversified exposure to the global natural resources sector.
• The ETF has a low expense ratio and is actively managed by a team of experienced professionals.
• DNR has a strong track record of outperforming its benchmark index.
• The ETF is well-positioned to benefit from the long-term growth potential of the natural resources sector.

Risks

Volatility: The natural resources sector is inherently cyclical, leading to periods of high volatility. Market Risk: The ETF is subject to market risks, such as changes in interest rates, economic conditions, and political events.

Who Should Consider Investing

• Investors seeking exposure to the global natural resources sector.
• Investors with a long-term investment horizon.
• Investors comfortable with the inherent volatility of the natural resources sector.

Fundamental Rating Based on AI

Based on an AI-based analysis of DNR's fundamentals, the ETF receives a 7 out of 10 rating. This rating considers various factors, including financial health, market position, and future prospects.

Justification:

• DNR has a diversified portfolio of high-quality companies across the natural resources sector.
• The ETF has a strong track record of outperforming its benchmark index.
• DNR is managed by a reputable and experienced asset management firm.
• The natural resources sector has a positive long-term outlook.

However, the relatively small market share and potential volatility are factors that contribute to a lower rating.

Resources and Disclaimers

Sources:

• DWS Website: https://www.dws.com/en-us/
• ETF.com: https://www.etf.com/
• Bloomberg Terminal

Disclaimer: This information is for general educational purposes only and should not be considered investment advice. Please consult with a licensed financial professional before making any investment decisions.