Is Tribeca Global Natural Resources (ASX:TGF) the Perfect Resource Play?

Jason McIntosh discusses why Tribeca Global Natural Resources is his ETF of choice for the resource sector. This interview appeared on Ausbiz on 3 February, 2021.

Host: Jason, what are you looking at when it comes to the resources space? I know you’ve got Tribeca Global Natural Resources (ASX:TGF) on your list? What do you like about this one?

Jason: I’m bullish on commodities in general over the medium term — say the next five years plus. I think we’re potentially heading towards a cyclical up move in commodities generally. And I’m looking at how to strategically position for that scenario. Some of the locally listed options are stocks like BHP, RIO, and Fortescue. But they’re heavily tilted towards iron ore, which is okay, because I think iron ore will benefit. But I’d rather a more rounded approach with a lot of different aspects.

What I like about the Tribeca Global Natural Resources ETF is that it’s a global play — not just limited to ASX stocks. They also split their portfolio into three tiers: 50% is focused on a green theme, so it’s around commodities like copper, lithium, nickel, uranium. All the things you need to electrify the economy, and uranium, which is a virtually zero emissions energy source.

Then they’ve got 30% in the monetary expansion theme, which is centred on central banks continuing to expand their balance sheet. I believe there’s a real risk of inflation building over the next few years. And should that happen, then precious metals have been a traditional hedge.

Lastly, 20% of the portfolio is in base metals, which is all geared towards infrastructure and fiscal spending. This appears central to government strategies as the global economy comes out of the COVID recession.

I think what Tribeca is doing makes a lot of sense. It gives broad exposure to many global players, which you wouldn’t get through buying an ASX listed resource company. The Tribeca Global Natural Resources ETF is purpose-built.

The stock’s NTA is 20% below the market price, so it makes sense from an entry point of view. I think it’s just been out of favour. Generally, the stocks the company invests in have been out of favour as well. But interest is coming into the underlying commodities. Copper is at a multiyear high, but this is after several years of being sold off. I think it’s early stages, and I think Tribeca Global Natural Resources ETF is a good way to position in the resources sector.

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