Many factors have weighed on natural resources equities, and the sector has been beaten down for a long time. There is significant likelihood of reflation and a dollar decline due to massive fiscal and monetary stimuli. Natural resources equities are a proven vehicle for portfolio diversification and positive upside under these scenarios. The FlexShares Morningstar Global Upstream Natural Resources ETF (GUNR) checks all the boxes: attractive valuation, relative performance, diversification, quality, operating characteristics, and a nice dividend yield. Near-term risks suggest it might be wise to wait for a lower entry point.

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