Commodities have been having a decent run over the last year or so with gold, oil and platinum group metals (PGMs) all moving higher during the pandemic and into 2022.
The war in Ukraine has propelled this to new levels. Those wanting exposure via an ETF can have a look at the Resi10 ETF from Satrix. This has been my preferred exposure since war broke out, albeit I was buying during 2021 and increased my exposure recently.
is one of the early ETFs listed on the JSE is was launched in 2006.
The index holds only ten stocks and is capped so no stock can have a weighting of more than 30% in the index.
Currently BHP Group and Anglo American are each at ±30% but the index shuffle on the 18th March 2022 will be BHP Group drop to around 10% and the other commodity stocks in the index will then be up-weighted.
Top 10 holdings as of 31 December 2021
A very important point is that commodities and resource stocks are extremely cyclical, so they are not buy-and-hold in your bottom drawer. At some point, this commodity boom will fade and so will the prices and this ETF. But the cycle could last many more years.
Another factor of this index is that with record profits from the miners the ETF currently has a dividend yield of almost 5% and that could rise even higher in time if the boom continues.
|ETF name||Satrix RESI|
|Issue date||11 April 2006|
|Total expense ratio||0.44%|
|ETF Benchmark||FTSE/JSE Capped Resources 10 Index|
|Tax-free savings account||Investment allowed|
|Performance 1 year||+21.5%|
|Performance 3 years||+95.5%|
|Performance 5 years||+180.6%|
|Performance 10 years||+73.0%|