Raw Earth: The Nitty Gritty of a Natural Resources ETF

Natural Resources ETF

Oh, carbon, you fickle friend. We know you’re the building block on which our life form depends, but the carbon footprint of a modern human can be pretty darn big.

Many of us want to reduce our carbon footprint and live a more eco-friendly lifestyle. We recycle, take public transportation, and carry reusable water bottles.

We may do our part, but non-renewable fossil fuels are still big business. And love ‘em or hate ‘em, they touch every part of our lives – from tires, trash bags, and toothbrushes to cosmetics, credit cards, and condoms. If it’s synthetic in any way, it probably came from deep in the earth. But what exactly is down there?

Fossil Fuels

Fossil fuels are non-renewable resources formed in the ground from prehistoric plants and animals*. Real raw earth, pre-dinosaur-era stuff. Petroleum (oil and natural gas) and coal are fossil fuels. And when you add seeds, fertilizers, and metals, these resources form the list of raw materials that run our planet and sustain our lives. With nearly 7.5 billion people worldwide, that’s a big job!

True global behemoths like Exxon Mobil, Chevron, and Monsanto process these raw materials so you don’t have to. So give a nod to them as you’re watching your favorite sports team play — your red Solo® cup, plastic remote control, and lucky team jersey were all made using these raw materials.

You’re Investing in Natural Resources

How do you get involved without getting your hands dirty digging in the mud? You can invest in Raw Earth, an investment that tracks the S&P® Global Natural Resources Index (GNR).

This investment provides exposure to three huge global industries:

  1. Energy companies find and extract raw materials, create and refine products, and distribute energy to fuel the world.
  2. Agribusiness companies merge the world of agriculture and business, taking something from seed to packaged product and provide food and fiber to fuel the world.
  3. Mining companies extract materials from the earth that can’t be grown from seeds or created artificially in a lab.

These companies handle the raw materials that we use to fuel our everyday lives. This fund allows you to get down and dirty with the global natural resources market without actually getting down and dirty.

You’re Investing in Basic Materials

The basic materials sector represents nearly 60% of the fund and includes agribusiness and mining companies. They work with seeds, herbicides, fertilizers, metals, and agrochemicals. Industry giants Syngenta AG, BHP Billiton Limited, Monsanto Company, and Potash Corp. of Saskatchewan discover, develop, and process these raw materials – you know, the basic materials that are part of nearly everything we use and consume.

You’re Investing in Energy

Nearly 35% of the fund includes energy titans like Exxon Mobil, Total SA, Royal Dutch Shell, BP, and Chevron Corporation. These companies are involved in the exploration and development of oil and gas that’s used to power everything from your personal car to the machinery in manufacturing plants.

Rounding out the investment are global players in the timberland real estate biz (Rayonier, Inc. for one) and consumer staples world (like Archer-Daniels-Midland Company). They’re responsible for all the food, feed, and fuel needed to produce, process, and distribute much of what we eat and drink.

You’re Investing Globally

The natural resources market is truly global and so is this fund. US companies only represent 31.25% of the fund – the rest is spread across North America, South America, Europe, Australia, and Asia.

Raw Earth lets you invest in the global natural resources market without leaving your couch. It’s important to note that this investment can be volatile because of the strong influences international economies, politics, and environmental changes play. I

f you choose to invest in Raw Earth, make it part of a diversified portfolio.



Footnotes
*As defined by the U.S. Department of Energy Data pulled from fund site on 1/28/17




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