S&P Dow Jones rolls out S&P Global Resources Select Equal Weighted Index

Oct 23rd, 2012 | By | Category: ETF and Index News

S&P Dow Jones Indices has announced the launch of the S&P Global Resources Select Equal Weighted Index, a new thematic index designed to provide investors with broad, diversified exposure across a spectrum of commodities producers.

S&P Dow Jones rolls out S&P Global Resources Select Equal Weighted Index

The new S&P Global Resources Select Equal Weighted Index is designed to provide investors with broad, diversified exposure across a spectrum of commodities producers.

The index is comprised of 100 of the largest publicly traded commodities and natural resources companies in five key markets: Australia, Canada, Hong Kong, UK and US.

It is structured around three clusters, based on the GICS classification: Agriculture, with 30 constituents; Energy, with 25 oil and gas constituents and five coal constituents; and Metals and Mining, with 20 industrial metals constituents and 20 precious metals constituents.

Vinit Srivastava, director of strategy indices at S&P Dow Jones Indices, commented: “The S&P Global Resources Select Equal Weighted Index provides an alternative entry to commodity markets versus traditional futures-based financial products. Another interesting characteristic of this index is the equal-weighting, which gives a slight bias to smaller-cap companies within the index.”

To be eligible for inclusion in index, constituents must be included in the S&P Global BMI and have a total market capitalisation above $1 billion and a three-month average daily trading value above $5 million as of each annual rebalancing. Constituents must also be traded on one of the following stock exchanges: ASX (Australia), TSX (Canada), HKSE (Hong Kong), LSE (UK) or NYSE (US).

Whilst the index has been licensed to Bank of China Investment Management for the launch of a financial product in China, as yet there are no exchange-traded funds (ETFs) benchmarked to it.

However, for investors looking for immediate access to global resources companies a number of ETFs potentially fit the bill, including an SSgA fund based on the S&P Global Natural Resources Index, which, apart from the difference in weighting methodology and key market stipulation, is not massively dissimilar to the S&P Global Resources Select Equal Weighted Index.

SPDR S&P Global Natural Resources ETF (GNR)
Tracks the S&P Global Natural Resources Index comprised of 90 of the largest global publicly traded companies, based on market capitalisation, in natural resources and commodities businesses. NYSE Arca. TER 0.40%.

Market Vectors RVE Hard Assets Producers ETF (HAP)
Tracks the Rogers-Van Eck Hard Assets Producers Index comprised of over 330 global listed companies engaged in the production and distribution of hard assets, encompassing sectors such as materials, energy, agriculture and water, and related products and services. NYSE Arca. TER 0.49%. This fund has gained HMRC UK Fund Reporting status.

WisdomTree Global Natural Resources ETF (GNAT)
Tracks the WisdomTree Global Natural Resources Index comprising the 100 largest global dividend-paying companies in natural resource industries. This includes energy companies, such as oil and gas producers, basic materials companies, such as metal and mining companies, and agriculture companies. NYSE Arca. TER 0.58%.

Unfortunately for UK and European investors, there is no one single fund that offers comprehensive global exposure to resources companies. However, investors could blend together funds tracking the materials and energy sector segments of the MSCI World Index (see below).

Lyxor ETF MSCI World Materials TR (MATG)
London Stock Exchange, Borsa Italiana. TER 0.40%

db X-trackers MSCI World Materials TRN Index ETF (XWSM)
London Stock Exchange, Deutsche Börse, Borsa Italiana. TER 0.45%

Amundi ETF MSCI World Energy (CWE)
London Stock Exchange, Deutsche Börse, NYSE Euronext Paris, Borsa Italiana. TER 0.35%

Lyxor ETF MSCI World Energy TR (NRGG)
London Stock Exchange, Borsa Italiana. TER 0.40%

db X-trackers MSCI World Energy TRN Index ETF (XWSE)
London Stock Exchange, Deutsche Börse, Borsa Italiana. TER 0.45%

In addition to the MSCI World sector funds listed above, a suite of iShares funds (see below), based on S&P Commodity Producers indices covering the global natural resources sector (excluding metals), could also be added to the mix.

iShares S&P Commodity Producers Agribusiness ETF (SPAG)
London Stock Exchange. TER 0.55%

iShares S&P Commodity Producers Oil and Gas ETF (SPOG)
London Stock Exchange. TER 0.55%

iShares S&P Commodity Producers Gold ETF (SPGP)
London Stock Exchange. TER 0.55%

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