But SPDR S&P Global Natural Resources ETF and FlexShares Morningstar Global Upstream Natural Resources ETF have some investors thinking about the ’70s, a time of geopolitically infused inflation in metals, energy and other commodities. Unlike many commodity-tracking ETFs, which directly hold physical metals such as gold, silver or platinum, or track a benchmark of energy, agricultural and other commodity futures, these ETFs hold companies devoted to agricultural production and natural-resource extraction. “We see GUNR as a diversified inflation hedge,” says Bob Toomey, director of research at S.R. Allocating anywhere from 3% to 6% of client portfolios to natural resources, he says GUNR’s sector and country exposure simplifies client portfolios from potentially more speculative adviser-driven weighting of specific natural-resource products. These products, structured either as notes or funds that hold commodity futures, have more complex distribution and tax consequences than funds that track equity-based benchmarks.

Source: Wall Street Journal March 06, 2017 03:00 UTC