WOOD (iShares Global Timber & Forestry, Expense Ratio 0.51%, $284 million in AUM) is the larger of the two funds, having debuted in June of 2008 and the ETF traded at a new 52-week high just yesterday before tailing off a bit. The fund only averages about 16,000 shares traded daily on a one-month trailing basis, so it is not exactly a popular or heavily trafficked fund, but we can see a scenario where this and competing ETF, CUT (Guggenheim Timber, Expense Ratio 0.55%, $199 million in AUM) could certainly become active given the headlines regarding the devastating weather and the inevitable rebuilding process that will take place.
WOOD has seen respectable inflows year-to-date, to the tune of about $31 million in while CUT has seen modest outflows of about $10 million. According to fund literature, WOOD provides “exposure to companies that produce forest products, agricultural products, and paper and packaging goods,” and notably the underlying index is global in nature and not just relegated to U.S. domiciled companies. We see twenty-six individual holdings within WOOD and the top five weightings are as follows: 1) West Fraser Timber Co. (Canadian listed, 9.09%), 2) RYN (7.34%), 3) WY (7.13%), 4) PCH (5.00%), and 5) Klabin SA (Brazil listed, 4.33%).
Guggenheim’s CUT on the other hand tracks the MSCI Global Timber Index and owns nearly three times the number of securities that WOOD does with seventy-seven individual holdings. When we look at top weightings in CUT we see a more evenly weighted portfolio on the top end: 1) WY (5.23%), WRK (5.11%), 3) IP (5.01%), 4) Amcor Ltd (4.89%), and 5) PKG (4.82%).
When we look at the country exposures in these two funds we see some differences as well where WOOD has a 41% weighting to the U.S., 12% to Canada, 12% to Brazil, 10% to Japan, and lesser exposures to countries such as Finland, South Africa, Ireland, the U.K., and Sweden. CUT on the other hand has its largest weighting in the U.S. (42%), and followed by Finland (10%), South Africa (8%), Canada (7%), Australia (6%), U.K. (5%), Japan (5%), Brazil (5%), Sweden (5%), and lesser allocations to countries such as Ireland, Chile, Portugal, China, Spain, and France.
The iShares S&P Global Timber & Forestry Index (NASDAQ:WOOD) was trading at $64.68 per share on Friday afternoon, up $0.10 (+0.15%). Year-to-date, WOOD has gained 22.02%, versus a 11.38% rise in the benchmark S&P 500 index during the same period.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.