iShares Global Timber & Forestry ETF

WOOD

市值 US$2.56億

Midstream has been a big winner for me over the past 11 months since I made it my highest conviction pick. I have recently shifted where I am deploying most of my incremental capital. I detail my two favorite places to deploy capital right now.

I reiterate my Buy rating on the iShares Global Timber & Forestry ETF, favoring accumulation on price weakness. WOOD offers a 2.32% yield, covers its 0.40% expense ratio, and provides exposure to lumber prices with better liquidity than lumber futures. Technical support at $63.78 remains intact. A break below this level would prompt a reassessment of the bullish thesis.

Plus: The U.S. is banning exports of lithium ion battery and tungsten waste

Steep duties on Canadian lumber, wildfires and sawmill closures have cut supply and pushed up prices.

Materials are often viewed as a sleepy, cyclical corner of the market, but the artificial intelligence (AI) buildout is adding vim and vigor to the sector.

The dollar's dominance is quietly cracking, which will likely lead to a significant macro shift in the coming years. While I have bet heavily on several real asset sectors, they have all soared materially higher since I started investing in them. I detail two of the best opportunities remaining in the real asset space to benefit from the coming macro shift.

iShares Global Timber & Forestry ETF (WOOD) has underperformed, with a 12% loss versus a 29% S&P 500 gain over two years. Ongoing structural weaknesses in the timber industry and a lack of historical compounding make WOOD unattractive versus broad market benchmarks. Within WOOD's holdings there is a degree of dilution of pure timber exposure, with significant allocations to packaging and materials sectors beyond forestry.

It's not the worst performer among global ETFs, but it's been a disappointment this year. Ties to the residential real estate market have been problematic for this fund.

U.S. sawmills say tariffs, shrinking export markets and competition from cheaper wood alternatives are driving a surge in closures that threatens the hardwood industry.

I am concluding my research on the forest industry with the iShares Global Timber & Forestry ETF. The companies I have previously covered account for ~25% of WOOD's 225.6 million AUM. The Invesco MSCI Global Timber ETF is WOOD's closest competitor, with a $41.2 million AUM. Smaller size is synonymous with thinner liquidity, as reflected by a higher median bid-ask spread. Despite lower liquidity, CUT's total expense ratio of 1.02% is ~2.5x higher than WOOD's 0.40%. Considering their highly similar portfolios, it is difficult to justify such a spread.