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Materials ETF (WOOD) Hits New 52-Week High

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For investors seeking momentum, iShares Global Timber Forestry ETF (WOOD - Free Report) is probably on radar now. The fund just hit a 52-week high and is up around 70.9% from its 52-week low price of $39.55/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

WOOD in Focus

The underlying S&P Global Timber & Forestry Index is comprised of approximately 25 of the largest publicly- traded companies engaged in the ownership, management or upstream supply chain of forests and timberlands. These include forest products companies, timber real estate investment trusts, paper products companies, paper packaging companies and agricultural products companies. It charges 46 basis points in annual fees (see all Materials ETFs here).

Why the Move?

Lumber prices have been rising rapidly this year. Lumber prices have jumped more than 170% since mid-April, per CNBC. The Covid-19 crisis and the fires in the West have been resulting into the increase in lumber prices. Strong demand from the homebuilding sector has also been contributing to the price gains.

More Gains Ahead?

Currently, the fund WOOD has a positive weighted alpha of 22.10. So, there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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