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>>> The 3 Largest Thematic ETFs (GUNR, IGE)


By Craig Anthony



http://www.investopedia.com/articles/etfs-mutual-funds/042516/3-largest-thematic-etfs-gunr-ige.asp?partner=YahooSA



Thematic exchange-traded funds (ETFs) are funds that prioritize the selection of investments and their inclusion in the portfolio based on a predetermined theme or specific issue. For example, the PowerShares Cleantech Portfolio (NYSEARCA: PZD) invests only in the stocks of clean technology and related companies. Another example is the Market Vectors Agribusiness ETF (NYSEARCA: MOO), which invests in companies focusing on agri-chemicals, farm equipment, animal health and related agricultural products. Thematic funds cover a wide range of issues, including workspace equality, global water, socially responsible companies, nuclear energy, robotics and more.

Following is a list of the three largest thematic ETFs, based on assets under management (AUM), as of March 2016.

FlexShares Morningstar Global Upstream Natural Resources Index Fund

The largest thematic ETF on the market today, with $1.6 billion in AUM, is the FlexShares Morningstar Global Upstream Natural Resources Index Fund (NYSEARCA: GUNR). This fund allows investors to capitalize on the growing demand for natural resources, which is caused by globalization. GUNR focuses on the upstream portion of the natural resources process, which means it focuses on companies involved in exploring, recovering and producing natural resources. It does not focus on midstream companies, such as those focused on storing and transporting resources, nor does the fund focus on downstream companies, such as those focused on distributing resources.

The portfolio has 121 different holdings with an average market capitalization of $47.8 billion. The fund is invested in more than 10 countries, though its top five account for nearly 80% of the portfolio. They are the United States, the United Kingdom, Canada, Australia and Switzerland. Its top three sectors — metals, energy and agriculture — account for approximately 88% of the total assets. The expense ratio of the fund is 0.48%, and its 30-day SEC yield is 3.88%. The 52-week range of GUNR is $18.69 to $32.83.

iShares North American Natural Resources ETF

The second-largest thematic ETF, with slightly over $1 billion, is the iShares North American Natural Resources ETF (NYSEARCA: IGE). The fund invests in companies in the United States and Canada that are involved in operations related to oil and gas, forestry and mining. The theme of this fund is focused exposure to natural resources equities operating in North America.

The portfolio invests in 130 different companies. It has a price-to-earnings (P/E) ratio of 21.9. Approximately 80% of the portfolio is invested in companies involved in the following aspects of oil and gas: drilling, equipment, exploration, production, refining, storage and transportation. The fund is also invested in companies involved with gold, paper, construction materials, mining, coal and forest products. Nearly 85% of the portfolio is invested in companies in the United States. The expense ratio of IGE is 0.47%, and its 30-day SEC yield is 2.89%. The fund's 52-week range is $22.71 to $40.88.

iShares Global Infrastructure Fund

With $929.7 million in AUM, the iShares Global Infrastructure Fund (NYSEARCA: IGF) is the third-largest thematic ETF on the market as of March 2016. This fund invests in companies listed on developing market exchanges whose businesses are focused on infrastructure. The fund primarily invests in companies doing business in the following areas: communications, electricity, transportation and water.

The portfolio has 75 investments in more than 14 countries. Companies within the United States account for 35.08%, while the top-five weighted international companies, totaling 40% of the portfolio, are Australia, Spain, Canada, Italy and the United Kingdom. Utilities comprise 43% of the fund, while transportation and energy comprise 41% and 15%, respectively. The portfolio holds approximately 1% in cash. The expense ratio of IGF is 0.47%, and its 30-day SEC yield is 3.30%. The fund's 52-week range is $32.55 to $44.31.

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