In a recent episode of “Behind the Ticker,” Al Chu, portfolio manager at Man GLG, discussed his role managing the American Beacon GLG Natural Resources ETF (ticker: MGNR). Chu, who has over two decades of experience in natural resources investing, described his journey from managing natural resources strategies at BNY Mellon and various hedge funds to leading this strategy at Man GLG. With the backing of Man Group, a UK-listed alpha-focused alternative manager, Chu’s expertise is now accessible to a broader audience through the active ETF structure.
Chu explained that MGNR takes a long-only, equity-based approach to natural resources investing, distinct from many other commodity ETFs that rely on futures or fund-of-funds models. The ETF focuses on equities within the natural resources space, such as oil producers, oilfield services, and mining companies, aiming to capitalize on alpha opportunities driven by commodity cycles. The active strategy allows the fund to adjust exposures dynamically, targeting subsectors and companies that offer the highest return potential based on commodity trends, regional dynamics, and bottom-up company analysis.
A unique aspect of MGNR is its structured investment process, which begins with identifying favorable commodity cycles, then drilling down into specific subsectors, and finally selecting companies with strong fundamentals, management, and assets. Chu highlighted the importance of maintaining diversification within the fund, capping individual positions at 5% and limiting sector and subsector concentrations to manage risk effectively. The fund typically holds 40 to 50 names, representing a concentrated yet diversified exposure to the natural resources space.
Chu also addressed the fund’s appeal to advisors and investors looking for exposure to real assets with low correlation to traditional equities and bonds. MGNR is positioned as an alternative to passive commodity exposure, providing not only a hedge against inflation but also an opportunity to benefit from the operational and financial leverage of resource companies.