Three Reasons for GUNR

As compared to commodity futures investment vehicles, an equities-based strategy allows for greater transparency, potentially more tax-efficient structure, and unique exposure to sectors not available through futures such as water resources, timber, dairy and poultry/fish protein.

Global equities can provide distinct advantages including long term capital appreciation and the ability to generate income. Natural resource equity prices generally move independent of short-term stock market trends, with a particularly low correlation to the financial sector. An equity-based strategy that invests in companies that own, harvest, or extract natural resources provides exposure to assets that aren’t widely traded — or aren’t available at all — on the commodity futures markets. Additionally, this strategy can provide many of the benefits of a futures-based approach — but without the structural headwinds, such as negative roll yield. This approach also avoids the complex and volatile nature of investing in futures contracts, which requires strategies to continually replace expiring contracts with new ones at potentially higher costs. Overall, an equity-based approach has consistently outperformed the futures-based approach over longer periods.

BROAD, BALANCED APPROACH WITH GLOBAL DIVERSIFICATION

With growing populations and increasing per-capita income, global markets are in the early stages of what is expected to be an extended period of demand expansion for energy, food products, metals and other natural resources such as paper and water. In 2022, the United Nations forecasted that global population is expected to grow from 7.9 billion in 2021 to 8.5 billion in 2030, 9.7 billion in 2050 and 10.9 billion in 2100. Adding exposure to global natural resources investments provides an opportunity to capitalize on the potential benefit of rising natural resource product prices. Focus on the upstream portion of the supply chain may help to increase investors’ exposure to the positive impact of rising prices. At the same time, diversification across sectors and regions may help mitigate the risk of skewed concentrations in sectors with a greater economic footprint. We believe this approach offers investors an opportunity to participate in the rising global demand for natural resources while maintaining a balanced position across emerging and established regions.

DEFINITIONS

Cash flow is the amount of cash that comes in and goes out of a company. Businesses take in money from sales as revenues and spend money on expenses.