Interested in more defensive plays? Uncertainty is on the rise for investors of all kinds, with interest in sturdier, more inflation-aware areas growing. Natural resources, for example, is one area that does well amid stubborn, latent inflation. Whether that’s construction materials or energy sources, supply chain or energy, goods like those tend to do well in periods of rising prices. The active natural resources ETF TURF, for example, offers a particularly potent approach.
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The T. Rowe Price Natural Resource ETF (TURF ) doesn’t invest strictly in commodities like other plays in the space. Rather, it focuses on the equity firms that operate in those areas. The active natural resources ETF charges a 44 basis point fee for its approach. The fund actively invests in global firms in the category as opposed to the domestic folks many of its peers have. That provides its active managers a wider pool of options to consider.
Specifically, the strategy focuses on companies in the upstream extraction of energy, mineral, and agricultural products. It applies a fundamental, bottom-up approach that can consider firms of any market cap, via both growth and value views.
For example, the fund invests in names like GlenCore LLC (GLNCY). The Swiss multinational engages in mining and commodity trading. The company has done well over the last five days, returning 7.25% in that time. It also invests in agricultural names like Nutrien LTD (NTR). The Canadian fertilizer firm owns the title of the largest producer of potash in the world. What’s more, it also claims the status of the second largest producer of nitrogen fertilizer in the world. It has returned 25.6% YTD, as well.
Looking ahead, if inflation sticks around, or if U.S. markets face another dip, TURF may be worth considering. Its active approach can help its managers find the strongest opportunities in its category, and potentially find some outperformance, too.
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