Barclays Introduces First Natural Resource ETF


Barclays Global Investors began trading the iShares Goldman Sachs Natural Resources Exchange Traded Fund (ticker: IGE), the first ETF of its kind. The fund tracks the Goldman Sachs Natural Resources index, a market capitalization-weighted index of 112 stocks designed to measure the performance of companies in the natural resources sector, which includes energy, precious metals, timber, and other sub sectors.

"For investors who are seeking to diversify their investment portfolios with a natural resources fund, the iShares Goldman Sachs Natural Resources Fund provides broad diversification in the sector in a cost effective manner," said Lee Kranefuss, BGI's CEO of Individual Investor and Exchange-Traded Funds Business. Traders in commodities have long had access to futures, but such activity is considered tricky and time consuming and most investors have shied away from it. This ETF can be bought long or sold short like any stock from a brokerage firm.

The new iShares will be managed by Barclays Global Fund Advisors, a subsidiary of Barclays Global Investors, N.A., and the manager of the largest selection of ETFs, known as iShares. The new fund will have an expense ratio of 0.50%.

For those interested in the energy sector, there is currently an iShares Dow Jones U.S. energy ETF (IYE), a Select Sector Energy fund (XLE), and an Oil Services HOLDRs (OIH).

Three New International Products

Barclays has also announced three international ETFs to help U.S. investors fine-tune regional weightings in their international portfolios. Like the Natural Resources fund, all three of the new international offerings from iShares have expense ratios of 50 basis points.They include:

  • iShares S&P TOPIX/150 Index Fund (ticker: ITF)
  • iShares S&P Latin America 40 Index Fund (ticker: ILF)
  • iShares MSCI Pacific ex-Japan Index Fund (ticker: EPP)

"Investors can make a focused investment, whether it's long or short, on regional economic behaviors," said Kranefuss.

TOPIX is considered the most representive index of Tokyo-listed equities, and the TOPIX/150 are a selection of the largest and most liquid of these equities. The TOPIX fund also represents the first "twin" fund that is listed separately on two markets but aims at the same index tracking goals.