Natural Resources and Commodities
Despite short-term fluctuations, the long-term rationale for investing in natural resource equities and commodities remains intact, benefitting investors as a tool to help enhance portfolio diversification, as a means to gain direct access to global growth and as a hedge to offset the impact of inflationary pressures.
The VanEck Approach
The Global Resources Strategy, an actively managed, equity-focused strategy, offers diversified natural resource exposure through a portfolio of companies operating in the gold and precious metals, base and industrial metals, agriculture, timber, oil, gas and renewable energy markets.
- The strategy’s sector and company exposure are meaningfully adjusted to adapt to underlying shifts in global fundamentals or developing industry themes, such as sustainable resource development and operational efficiency advancement.
The passively managed Constant Maturity Commodity Index (CMCI) Strategy addresses the deficiencies inherent with many popular commodity index funds.
- By spreading its exposure across a range of maturities and maintaining a constant maturity, CMCI seeks to mitigate the impact of negative roll yield and isolates “pure” commodities exposure.
While the familiar themes of investing in natural resources and commodities are under pressure, many positive aspects of the future outlook remain.
- Changing market environments reinforce the consistent need and rationale for investing in natural resource equities and commodities has stayed consistent: to enhance portfolio diversification, access global growth and hedge against inflation.
- Many of the companies and industries have spent the last several years restructuring their business models and strategy. As a result, we believe they have secure balance sheets, lower operating costs, and improving returns on/of capital (i.e., dividends and share repurchases) and thus are positioned to weather the current environment.
- Many companies also exhibit what we view as fascinating longer term growth profiles as direct inputs and beneficiaries of the investment output needed for the resource transition movement fueled by technological advances and new, increased applications of metals and minerals.
VanEck pioneered commodity-equity investing with the nation’s first gold equity strategy in 1968 and reaffirmed its leadership when it was among the first to provide investors an actively managed portfolio of diversified natural resource equities in 1994.
Today, our capabilities span actively and passively managed strategies, from physical commodities to natural resource equities. We offer specialized exposure to individual sectors and diversified solutions with broad exposure across sectors and industries.