Morningstar Advisor - February/March 2013 - (Page 67)
Morningstar’s Equity-Based Solutions for Investing in Commodities
Morningstar offers two ways to achieve investment exposure to commodity-producer equities.
Morningstar Global Upstream Natural
Resources Index Stock Assignment
Launched in 2011, the Morningstar Global
Upstream Natural Resources Index measures
the performance of stocks issued by
companies that have significant business
operations in the ownership, management,
or production of natural resources in
five categories: agriculture, energy, metals
and mining, water, and timber. The index uses
a proprietary industry classification
system to identify companies within these
categories. Individual stock weights, as
well as category and regional exposure, are
capped to promote diversified exposure.
Sectors
Agriculture
Energy
Metals
& Mining
Water
Timber
Industry
Agricultural
Inputs
Oil and Gas
Exploration and
Production
Aluminum
Utilities—
Diversified
Lumber and
Wood Production
Utilities—
Regulated Water
REITs
Farm Products
Industrial Metals
and Minerals
Integrated Oil
and Gas
Gold
Paper and Paper
Products
Weight (%)
Morningstar Commodity
Producer Indexes
An alternative approach is the Morningstar
Commodity Producers Index family,
which is designed to offer a high correlation
with underlying commodities while
supplying upstream commodity exposure to
companies that do not hedge against
production (excluding gold mining). The
Commodity Producers Index family consists
of distinct indexes covering agriculture,
energy, metals and mining, and gold. Rather
than use a standard market-capitalization
weighting system for these indexes,
Morningstar assigns scores to each company
based on its structural leverage to commodity
prices and its market capitalization. The
weighting schemes used in these indexes
include sensitivity factors, placing higher
weights on upstream companies within each
index, based on their structural leverage
to commodities—for example, agricultural
inputs or oil-and-gas exploration.
30
30
30
30
30
30
15
5
Sectors
Agriculture
Energy
Metals
& Mining
Gold
Industry
Agricultural
Inputs 4
Oil and Gas
Exploration and
Production 3
Aluminum 1
Gold Mining
Companies
(Producers
Only) 4
Stock Limit
Sensitivity Factor
4 = High, 1 = Low
Farm and
Construction
Equipment 3
Integrated Oil
and Gas 2
Diversified
Metals
and Mining 1
15
5
Steel 1
Farm Products 2
Confectioners 1
Coal and
Consumable
Fuels 1
Precious Metals
and Minerals 1
Oil and Gas
Refining
and Marketing 1
Weighting
Float Market Cap Float Market Cap Float Market Cap Float Market Cap
MorningstarAdvisor.com 67
http://www.MorningstarAdvisor.com
Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2013
Morningstar Advisor - February/March 2013
Contents
Contributors
Letter From the Editor
Social Media, the Old- Fashioned Way
Do You Use Active Strategies?
Youth Appeal
How to Buy the Unloved 2013
Morningstar Managers of the Year
Investments á la Carte
Investment Briefs
Approaches to Absolute-Return Investing
In Agriculture, It’s Good to Be Strong
Yes, There Are Good Active Funds
The Decoupling
Where It Could Pay to Be Active
The Active Fund That Defies Obsolescence
The Epitome of an Active Manager
Lines of Communication
The Existence of Market Timing ‘Intelligence’
A Route to Commodities that Bypasses the Futures Market
Best Positioned for Health-Care Reform
Diversified Stock Funds That Earn Their Stars
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
A Twisted Debate
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