This is obvious given that one of the requirements to be in the investable pool of GNR is that the company should have a free-float market capitalization of at least $1 billion. Most of the constituents of the top 10 holdings of GNR are considered giants in their respective sectors. The biggest strength of GNR lies in the structuring of this fund. Even though the weightings are assigned to individual holdings based on market capitalization, the capping of 5% per stock across more than 100 stocks makes GNR’s composition widely balanced. The selection is such that all the holdings are large-cap companies and they are picked from the global equity markets giving GNR cross-continental diversification. GNR invests in businesses from the natural resources sector based on their market capitalization. However, the top 10 holdings of GNR are exactly the same as that of its index and with almost the same weightings. This uncommon feature where the ETF has more holdings than the underlying index is possible because of the sampling technique mentioned above, where the fund can include securities that are not included in the index. GNR has 121 Holdings (out of which 101 are stocks and the remaining are investments in futures and currencies) while the index has 90. Components of each sub-index comprise one-third of GNR giving equal distribution to all three. The components of GNR are three sub-indices: t agriculture index, the energy index, and the metals and mining index. Alternatively, the fund may invest in an equal or even greater number of securities than that of the index. This means that the holdings in the fund could be fewer than the number of companies in the underlying index. In other words, the fund can invest in a subset of the companies from the index that best represent the characteristics of the index itself. GNR is an index fund backed by State Street Global Advisors that tracks the performance of the S&P Global Natural Resources Index by following a representative sampling technique. The current scenario combined with my optimism about its future lead me to rate GNR a Buy for now. This ETF has a robust construction and potential growth prospects as well as a supportive quantitative analysis. The conceptualization of this fund is intriguing, and I am impressed by its rigorous yet concise selection criteria that allow the ETF to seize potential opportunities while safeguarding itself from any possible downsides. One of State Street’s SPDR Index Shares Funds that I liked the most is the SPDR S&P Global Natural Resources ETF ( NYSEARCA: GNR).
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