SSgA will enter a market already occupied by the iShares S&P
GSCI Commodity-Indexed Trust ETF (NYSEArca:IGE). IGE is an ETF with
a North American focus that weights energy at 71.25 percent,
compared with 63.6 percent for SSgA's planned global fund. Other
funds in the space include the Jefferies | TR/J CRB Global
Commodity ETF (NYSEArca:CRBQ) and the Market Vectors RVE Hard
Assets Producers ETF (NYSEArca:HAP).
The proliferation of natural resources ETFs reflects a global
boom in commodities over the past 10 years. Rapid development in
emerging market countries-particularly China and India-is behind
spiking demand for basic materials such as oil, which is now about
70 percent higher in price than in 2000.
Using a replication strategy to mirror the S&P Global
Natural Resources Index, the new fund will invest at least 80
percent of total assets in the securities in the index, which is
composed of 60 of the largest publicly traded companies in the
global agriculture, energy, and metals and mining sectors.
Index constituents will be weighted according to market
capitalization but are capped so that no single security exceeds 5
percent of total assets. The fund may also invest in stocks not
listed in the index, as well as futures, options, swap contracts,
and other derivatives, according to the filing.
The S&P Global Natural Resources ETF will trade on the NYSE
Arca platform under the ticker symbol GNR. State Street didn't
specify expense ratios for the new fund in its filing.
IGE has an expense ratio of 0.75, while CRBQ and HAP charge
investors 0.65 percent a year in fees.
SSgA Fund Management will serve as investment adviser to the
As of December 31, 2009, the global energy sector was the most
heavily weighted in the S&P Global Natural Resources Index,
accounting for 63.6 percent of listings. The metals and mining
sector accounted for 26.9 percent, and the agriculture sector made
up the remaining 9.5 percent. The top three holdings at the end of
last year were BP, Chevron, and Total SA, the French energy
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