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Best Agricultural Commodity ETFs for Q1 2022

Agricultural commodities like corn, soybeans, and wheat are important to the meals provide, thus spawning an enormous world commodities market to purchase and promote them. Nonetheless, particular person agricultural commodities are topic to dramatic volatility associated to elements together with climate, season, inhabitants, and extra.

Traders in search of publicity to agricultural commodities could want to as a substitute personal an agriculture-focused exchange-traded fund (ETF). These ETFs present diversification by investing in futures contracts of a spread of various commodities, or by diversifying the maturity of the futures contracts held for a single commodity.

Key Takeaways

  • Agricultural commodities barely underperformed the broader market over the previous yr.
  • The agricultural exchange-traded funds (ETFs) with the very best one-year trailing complete returns are CORN, RJA, and DBA.
  • The highest holdings of those ETFs are futures contracts for corn, wheat, and occasional, respectively.

5 distinct agricultural commodity ETFs commerce in the USA, excluding inverse and leveraged funds in addition to funds with lower than $50 million in assets under management (AUM). These ETFs present publicity to agricultural commodities, not agricultural corporations.

Agricultural commodities, as measured by the S&P GSCI Agriculture Index, have barely underperformed the broader market with a complete return of 38.9% over the previous 12 months in comparison with the S&P 500’s complete return of 40.4%, as of Nov. 3, 2021. The very best-performing agricultural commodity ETF for Q1 FY 2022, based mostly on efficiency over the previous yr, is the Teucrium Corn Fund (CORN).

We study the three greatest agricultural commodity ETFs beneath. All numbers are as of Nov. 3, 2021.

  • Efficiency Over One-12 months: 61.2%
  • Expense Ratio: 2.19%
  • Annual Dividend Yield: N/A
  • Three-Month Common Day by day Quantity: 163,253
  • Belongings Beneath Administration: $131.0 million
  • Inception Date: June 9, 2010
  • Issuer: Teucrium

CORN is structured as a commodity pool, an funding car that swimming pools traders’ belongings to spend money on futures contracts. The fund supplies publicity to the worth of one of the vital necessary agricultural commodities. Corn is used as feed, gasoline, starch, sweetener, and even plastic. Traders could discover CORN interesting as a hedge towards inflation or just as a tactical tilt towards a selected section of the agricultural market inside a broader portfolio. The fund’s holdings are comprised solely of corn futures contracts of a number of maturities.

  • Efficiency Over One-12 months: 47.3%
  • Expense Ratio: 0.75%
  • Annual Dividend Yield: N/A
  • Three-Month Common Day by day Quantity: 95,330
  • Belongings Beneath Administration: $135.7 million  
  • Inception Date: Oct. 17, 2007
  • Issuer: Authorities of Sweden

RJA is structured as an exchange-traded note (ETN), a sort of unsecured debt safety that’s much like a bond however that doesn’t make curiosity funds and trades on an alternate like a inventory. The fund goals to copy the efficiency of the Rogers Worldwide Commodity Index — Agriculture Complete Return. This index is taken into account a widely known commodity benchmark and represents the worth of a gaggle of 20 agricultural commodities futures.

As an ETN, RJA exposes traders to the credit score threat of the issuing establishment but additionally avoids points associated to tracking error. With its slim focus, RJA is often used as a short-term tactical funding instrument to realize publicity to the agricultural commodities area. The highest three holdings of RJA are futures contracts of wheat, corn, and cotton.

  • Efficiency Over One-12 months: 33.6%
  • Expense Ratio: 0.94%
  • Annual Dividend Yield: N/A
  • Three-Month Common Day by day Quantity: 818,074
  • Belongings Beneath Administration: $938.6 million
  • Inception Date: Jan. 5, 2007
  • Issuer: Invesco

DBA tracks the DBIQ Diversified Agriculture Index Extra Return, an index composed of futures contracts of among the most liquid and broadly traded agricultural commodities. DBA additionally generates curiosity earnings from the its holdings of primarily U.S. Treasury securities. DBA is structured as a commodity pool. As a focused fund, DBA is often utilized to implement a short-term tactical tilt. Not together with collateral, the highest holdings of DBA embrace futures contracts for espresso, sugar, and corn.

The feedback, opinions, and analyses expressed herein are for informational functions solely and shouldn’t be thought-about particular person funding recommendation or suggestions to spend money on any safety or undertake any funding technique. Whereas we imagine the knowledge supplied herein is dependable, we don’t warrant its accuracy or completeness. The views and techniques described in our content material will not be appropriate for all traders. As a result of market and financial situations are topic to speedy change, all feedback, opinions, and analyses contained inside our content material are rendered as of the date of the posting and will change with out discover. The fabric isn’t meant as a whole evaluation of each materials reality relating to any nation, area, market, business, funding, or technique.

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