Here’s how several top advisors include natural resources in their clients’ portfolios.
John B. Cox, CFA, CAIA, MBA, Charles D. Haines LLC, Birmingham, Ala.
We like Ivy Global Natural Resources (IGNYX) managed by Fred Sturm. Our client portfolios typically have 5 to 8 percent invested in this fund.
We believe in the secular bull market in commodity stocks, and we feel like Ivy GNR gives us the best opportunity to capture the long-term trends.
Fred Sturm has been at the helm of the fund since its inception more than 13 years ago and has almost 30 years of investment experience.
He lives in Canada, which is a great place to be for a natural-resources fund manager.
The fund typically has 50 percent of its assets outside of the U.S. and tends to invest in very innovative companies.
Many of the fund’s competitors load up on the big energy companies, but Sturm does not do that.
While about half of the portfolio is energy-related, you will not find Exxon, Chevron, etc., in the fund.
It will have some exploration companies, natural gas pipeline companies, as well as fertilizer companies, chemical companies and water infrastructure companies.
It is a well-diversified fund that has produced great long-term results but will lag its benchmark and peer group from time to time.
Sturm will also hedge currencies and broad stock market exposure periodically.
Johanna Fox Turner, CPA, CFP, RLP, Milestones Financial Planning, LLC, Mayfield, Ky.
I am currently using two funds for clients investing in natural resources: Prudential Jennison Natural Resources Z (PNRZX) is my favorite right now.
I like PNRZX not only because it is no load, with a 9 percent turnover and a low (less than 1 percent) net-expense ratio, but also because its managers focus on energy commodities.