The FlexShares Morningstar Global Upstream Natural Resources ETF
(NYSEArca:GUNR) saw its total assets break above $1 billion this
week-just over a year after its inception-in a testament to
investors' growing appetite for risk exposure.
On Thursday, net inflows of $369.5 million that helped push the
ETF above the $1-billlion-in-assets mark, was said to be due to new
institutional investor interest. All in all, GUNR, which now has
$1.29 billion in assets, has attracted net inflows of more than
$483 million since the beginning of the year.
Behind the momentum is growing investor demand for riskier
assets in the form of commodities and natural resources after
having shunned the segment for much of last year, Northern Trust's
Global Head of
Shundrawn Thomas told IndexUniverse.
"A lot of people were looking at portfolio reallocations in
December and this month," Thomas said. "These people on the margins
were poised to put some risk assets back to work. We were looking
for these reallocations to happen, so this is a bit of a 'January
Still, appetite for risk isn't the only reason GUNR is
resonating with investors and advisors alike; performance relative
to its peers is another, Thomas said. Indeed, the fund's broad
approach has so far paid off for investors looking to tap into
commodities via equities instead.
GUNR, which first came to market in late 2011, has staged an
"impressive" run, with returns of some 17.8 percent since
inception, "outperforming competitors in the space during this time
frame," Paul Weisbruch, of Street One Financial, told
"Even in an environment without strong flows into commodities
funds like we saw much of last year, GUNR has done well," Thomas
The fund is one of the broadest equities-linked commodities ETF
in the market today, as it invests in firms in both emerging and
developed economies that are involved in the ownership, management
or production of natural resources such as energy, agriculture and
That diversification stands out in the face of some of its
competitors, which serve up narrower exposure, such as the Market
Vectors Agribusiness ETF (NYSEArca:MOO) and the Market Vectors RVE
Hard Assets Producers ETF (NYSEArca:HAP). GUNR's main competition
in the space, however, is the IndexIQ Global Resources ETF
(NYSEArca:GRES), which is also a broadly diversified fund that
provides global exposure to companies involved in the segment.
GRES, which came to market in late 2009, has just under $100
million in assets.
"This is a great example of an under-recognized,
under-appreciated fund, gaining significant traction and market
share after some seasoning," Weisbruch said.
"As with many ETFs, portfolio managers-especially on an
institutional level-generally will wait until a newer ETF has some
seasoning behind it in terms of real live track record, as well as
exhibited trading volume and real assets under management," added
"At this juncture, GUNR basically has all three of these
satisfied, so we would imagine similar portfolio
allocations/inflows will be likely in the near term across the
institutional ETF landscape," he continued.
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