NEW YORK (

TheStreet

) -- Investment firm

Jefferies

just released the

Thomson-Reuters Jefferies Commodity Equity Index Fund

(CRBQ)

, an exchange traded fund that, curiously, doesn't own commodities or commodities futures.

The ETF owns shares of companies that produce commodities, such as miners and oil firms. The fund avoids the hassles of both futures position limits, which have been a concern for the

United States Natural Gas Fund

(UNG) - Get Report

, and the physical ownership of metals.

The fund determines the weighting of its constituent stocks by the value of resources produced, not market value. Energy comprises 39% of the fund, agriculture 38%, base metals 14% and precious metals 8.7%.

The three largest holdings are

Monsanto

(MON)

, which accounts for 7.3% of the ETF,

ExxonMobil

(XOM) - Get Report

, 5.9%, and

Potash

(POT)

, 4.6%. There are 145 stocks in all, which, if nothing else, provides a list of companies to learn about for individual investment.

The country weightings hold some appeal. The U.S. is the largest, at 37% of the fund. Canada is second, with 14%. It's somewhat surprising that Australia takes up only 2.1%. Still, the fund owns the U.K. listings of

BHP Billiton

(BHP) - Get Report

and

Rio Tinto

(RTP) - Get Report

. If those names are thought of as Australian stocks, which they can be, the allocation goes up to 5.2%, which is better but still seems light for such a big player. The same idea applies to Brazil's 3.5% weighting and South Africa's 2%.

The reason to pick on the country weightings is that anyone who's done any fundamental research on the materials sector knows that Australia and Brazil are playing big roles in the mining and movement of resources used to build up the emerging world's infrastructure. I would want a broad-based commodity product to have more exposure to commodity-based economies.

The other quibble is the marketing effort that focuses on how the fund avoids the hassles of owning the actual commodities or proxies for the commodities. Clearly, any equity fund does this because equities aren't commodities. That pitch would make more sense if the Thomson-Reuters Jefferies Commodity Equity Index Fund were the first resources-oriented fund, but it's not -- not even close. Just about every big ETF provider has one or two funds in the space.

That being said, the fund offers promise as a proxy for materials and energy in a diversified portfolio. Both sectors are an easy place to add foreign exposure without a lot of Western Europe, which has a high correlation to the U.S., or Japan, which is light in resources stocks.

The energy industry comprises 12% of the S&P 500, while materials account for 3.5%. Given that the Thomson-Reuters Jefferies Commodity Equity Index Fund is 61% materials (versus 39% energy), a 10% portfolio weight would result in the portfolio having a 6% weighting to materials, a noticeable overweight versus the S&P 500. The resulting 4% portfolio weight in energy would likely require adding an additional energy fund or stock or both.

At the time of publication, MON was a client and personal holding.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback;

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