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Thursday March 29, 2012
CUT: Timber!
by Doug Fabian, Making Money Alert During March Madness, basketball players have been running up and down the hardwood. But Guggenheim Timber ETF (CUT) has made a big rebound off hardwood of a different sort. Indeed, the ETF has jumped like an All-American. CUT has been soaring since hitting a record low last fall. The Guggenheim/Beacon Global Timber Index ETF normally will invest at least 90% of its total assets in common stock, ADRs and global depositary receipts selected from a universe of global timber companies. CUT is attractive, even as major companies shift toward "paperless" operations. Here's a brief analysis of why I think CUT is worthy of consideration. Many timber growers have been forced to slash their prices during a weak market for new construction. Furthermore, timber growers have allowed for more trees to grow -- leaving additional inventory to sell. With depressed timber prices and signs of a budding recovery in housing, the recent rise in CUT may be a precursor to improved economics for such companies. So, what are the game changers within CUT's portfolio holdings? The dominant sector of CUT is materials, accounting for a whopping 77.36% of its portfolio. Other key holdings and their weights are: financials, 18.30%, and consumer discretionary, 4.35%. The fund also offers international diversification, with exposure to 11 different countries. U.S. equities account for 37.93% of CUT's portfolio, while Japan is a distant second with 16.37%. Among all of the stocks in CUT's holdings, the global paper and pulp company, Weyerhaeuser Co., holds the top spot, with 4.85% of the portfolio. Learn more about this financial newsletter at Doug Fabian's Making Money Alert. Related articles: 
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