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Should You Invest in the IQ Global Resources ETF (GRES)?

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Looking for broad exposure to the Materials - Broad segment of the U.S. equity market? You should consider the IQ Global Resources ETF , a passively managed exchange traded fund launched on 10/27/2009.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Materials - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.

Index Details

The fund is sponsored by Indexiq. It has amassed assets over $236.42 M, making it one of the average sized ETFs attempting to match the performance of the Materials - Broad segment of the U.S. equity market. GRES seeks to match the performance of the IQ Global Resources Index before fees and expenses.

This Index uses momentum and valuation factors to identify global companies that operate in commodity-specific market segments and whose equity securities trade in developed markets, including the U.S. These segments include the major commodity sectors, plus Timber, Water and Coal. The Index also includes short exposure to global equities as a partial equity market hedge.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.75%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 0%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Morgan Stanley Ilf/treas/inst (CASH - Free Report) accounts for about 9.26% of total assets, followed by China Shenhua Energy Co Ltd (1088) and Tyson Foods Inc (TSN - Free Report) .

The top 10 holdings account for about 34.43% of total assets under management.

Performance and Risk

The ETF has lost about -3.79% and is up about 6.60% so far this year and in the past one year (as of 05/02/2018), respectively. GRES has traded between $25.00 and $29.23 during this last 52-week period.

The ETF has a beta of 0.66 and standard deviation of 15.18% for the trailing three-year period, making it a low risk choice in the space. With about 238 holdings, it effectively diversifies company-specific risk.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.


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