Best Agricultural Commodity ETFs for Q2 2022

Agricultural commodities like corn, soybeans, and wheat are important to the meals provide, thus spawning a large international commodities market to purchase and promote them. Nevertheless, particular person agricultural commodities are topic to dramatic volatility associated to components together with climate, season, inhabitants, and extra.

Buyers searching for publicity to agricultural commodities could favor to as an alternative personal an agriculture-focused exchange-traded fund (ETF). These ETFs present diversification by both investing in futures contracts of a spread of various commodities or diversifying the maturity of the futures contracts held for a single commodity.

Six distinct agricultural commodity ETFs commerce in the US, excluding inverse and leveraged funds in addition to funds with lower than $50 million in property beneath administration (AUM). These ETFs present publicity to agricultural commodities, not agricultural firms.

Agricultural commodities, as measured by the S&P GSCI Agriculture Index, have outperformed the broader market over the previous 12 months, with a complete return of twenty-two.8% in contrast with the S&P 500’s whole return of 17.0%, as of Jan. 27, 2022.

The perfect-performing agricultural commodity ETF for the second quarter (Q2) of fiscal 12 months (FY) 2022, based mostly on efficiency over the previous 12 months, is the iPath Sequence B Bloomberg Espresso Subindex Complete Return ETN (JO).

We study the three greatest agricultural commodity ETFs beneath. All numbers are as of Jan. 27, 2022.

• Efficiency Over One-12 months: 71.4%
• Expense Ratio: 0.45%
• Annual Dividend Yield: N/A
• Three-Month Common Each day Quantity: 61,953
• Property Below Administration: $85.5 million
• Inception Date: Jan. 17, 2018
• Issuer: Barclays Capital

JO tracks the Bloomberg Espresso Subindex Complete Return, which displays the potential returns out there by way of an unleveraged funding in futures contracts on espresso. JO is structured as an exchange-traded observe (ETN), a kind of unsecured debt safety that’s much like a bond however doesn’t make curiosity funds and trades on an change like a inventory. The fund is very focused as a result of the underlying index consists of only one futures contract. JO’s web site alerts potential traders that possession of the ETNs just isn’t the identical as proudly owning pursuits within the futures contracts that make up the benchmark or a safety immediately linked to the benchmark’s efficiency. The only holding of JO is espresso futures contracts.

• Efficiency Over One-12 months: 35.0%
• Expense Ratio: 2.19%
• Annual Dividend Yield: N/A
• Three-Month Common Each day Quantity: 130,634
• Property Below Administration: $121.9 million
• Inception Date: June 9, 2010
• Issuer: Teucrium

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

• Efficiency Over One-12 months: 30.6%
• Expense Ratio: 0.75%
• Annual Dividend Yield: N/A
• Three-Month Common Each day Quantity: 172,772
• Property Below Administration: $171.2 million  
• Inception Date: Oct. 17, 2007
• Issuer: Authorities of Sweden

Like JO above, RJA is structured as an ETN. The fund goals to duplicate the efficiency of the Rogers Worldwide Commodity Index — Agriculture Complete Return. This index is a well known commodity benchmark and represents the worth of a bunch of roughly 20 agricultural commodities futures. As an ETN, RJA exposes traders to the credit score threat. RJA is utilized by some traders as a short-term tactical funding instrument to achieve publicity to agricultural commodities. The highest three holdings of RJA are futures contracts of wheat, corn, and cotton.

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