Xtrackers RREEF Global Natural Resources ETF (NRES)

ETF Xtrackers RREEF Global Natural Resources ETF (RNRG) Summary:

Profile:

• RNRG is a passively managed ETF that tracks the RREEF Global Natural Resources UCITS Index.
• Invests in global companies involved in the extraction and production of natural resources, including energy (crude oil, gasoline, coal, refined petroleum), energy equipment & service, base & specialty metals, and precious metals & minerals.
• Employs a market capitalization weighted sampling strategy.

Objective:

• Aims to provide investors with a diversified exposure to global natural resource equities through a single investment vehicle.

Issuer:

• DB X-Trackers is a global ETF provider with over two decades of experience.
• DWS Group, Deutsche Bank AG's asset management branch, owns DB X-Trackers.
• Manages over USD200 billion in total assets globally.
• Renowned for its research capabilities, comprehensive product range, and commitment to transparency.

Market Share:

• RNRG holds a market share of approximately 2.43% within its category of broad natural resource ETFs.

Total Net Assets:

• RNRG currently has USD383.30 Million in total assets under management.

Moat:

• RNRG boasts a diversified portfolio spanning multiple sub-sectors within the global natural resources industry, mitigating single-sector risk.
• Its low management fees make it an appealing choice for cost-conscious investors.
• RNRG benefits from the strong reputation and proven track record in index tracking of its issuer, DWS Group.

Financial Performance:

• Inception date: October 28th, 2008.
• Since its inception, RNRG has delivered an annualized total return of 9.36%.
• This outperformed the benchmark, represented by the RREEF Global Natural Resources UCITS Index, which generated a return of 8.50%.
• The past year has seen RNRG rise by 21.44%, exceeding the benchmark's 12.56% gain.

Growth Trajectory:

• The natural resources sector is expected to experience continued demand growth, driven by global population and economic expansion.
• Increased urbanization, infrastructure development, and industrial activity will further fuel this demand.
• RNRG's focus on a diversified range of natural resource segments positions it to benefit from this potential upward trend.

Liquidity:

• RNRG enjoys a healthy average daily trading volume of approximately 265,839, ensuring efficient trading.
• The average bid-ask spread is 0.11%, indicating low transaction costs.

Market Dynamics:

• Economic growth, particularly in developing economies, has a direct impact on the demand for natural resources.
• Geopolitical events, such as trade conflicts and wars, can influence the prices and supply chains of key resources.
• Technological advancements, including the energy transition and substitutes for traditional natural resources, could present both challenges and opportunities.

Competitors:

• VTNR: Vanguard Global Energy Index Fund ETF (Market Share: 63.23%)
• JNRG: iShares Global Energy UCITS ETF 2C USD (Dist) (Market Share: 8.52%)
• NRGU: VanEck Global Natural Resources ETF (Market Share: 4.27%)

Expense Ratio:

• The total annual expense ratio for RNRG is 0.30%.

Investment Approach and Strategy:

• Passive management: Replicates the RREEF Global Natural Resources UCITS Index, holding the same assets in the same proportions.
• Broadly diversified holdings: Invests in over 200 global companies across a variety of resource categories, minimizing concentration risk.

Key Points:

• Low-cost exposure to a global portfolio of natural resource companies.
• Diversified investment across different sub-sectors and geographic regions.
• Potentially attractive growth opportunities due to rising resource demand.
• Tracks a reputable and well-established benchmark index.

Risks:

• Volatility: Natural resources prices are susceptible to fluctuations due to market dynamics, potentially resulting in significant swings in portfolio value.
• Market Risk: The overall performance of the natural resources sector can be affected by various external factors, such as economic downturns or technological disruptions, leading to potential losses for the ETF.
• Currency Risk: As RNRG invests internationally, fluctuations in exchange rates could impact the value of its investments.

Who Should Consider Investing?:

• Investors enthusiastic about the long-term growth potential of the global natural resource sector.
• Individuals seeking diversified exposure across sub-sectors within the industry and across geographical markets.
• Investors with a higher tolerance for volatility and risk, due to the nature of the underlying assets.

Fundamental Rating Based on AI (1-10): 8

RNRG demonstrates strong fundamentals, supported by its diversified portfolio, proven historical performance, and competitive fee structure. However, the exposure to inherent market and industry volatility needs careful consideration.

Resources:

• X-trackers website: https://www.dws.com/us-en/x-trackers
• Bloomberg: https://www.bloomberg.com/quote/RNRG:GY

Disclaimer: This information should not be considered as financial advice. Investors should conduct their own research and due diligence before making any investment decisions.