Why an Agriculture ETF may be a great addition for your portfolio.
Many experts agree that commodities are a great sector to add to your portfolio because they are rarely correlated to other assets, like stocks or bonds. One area of commodities are greatly in favor is agriculture because of the massive growth we are seeing in emerging markets.
When people think of commodities they think of futures. But futures are risky. A MUCH less risky way to invest in commodities are through ETFs. ETFs are exchange traded funds and they trade like stocks. Check out the ETFs below for your portfolio.
CORN – Teucrium Corn Fund. The underlying holdings of this fund consist of corn futures contracts traded on the CBOT. Expense Ratio: 1.42% Market Cap: $101M Top Holdings: the second-to-expire CBOT Corn Futures Contract, the third-to-expire CBOT Corn Futures Contract, the CBOT Corn Futures Contract expiring in December following the third-to-expire contract.
RJA – Elements Exchange Traded Notes Rogers International Commodity Index (Agriculture Total Return). The Index represents the value of a basket of 20 agricultural commodity futures contracts and is a sub-index of the Rogers International Commodity Index. Expense Ratio: 0.75% Market Cap: $409 M Top Holdings: Corn, Wheat, Cotton, Soybeans, Coffee, Live Cattle, Sugar, Soybean Oil, Cocoa, Lean Hogs, Lumber, Milling Wheat, Rubber, Canola, Rice, Soybean Meal, Orange Juice, Oats.
SGG – iPath Dow Jones-AIG Sugar Total Return Sub-index. A single-commodity sub-index currently consisting of one futures contract on the commodity of sugar. Expense Ratio: 0.75% Market Cap: $42 M. Top Holdings: Sugar.
COW – Dow Jones-UBS Livestock Sub-index Total Return. The index is currently composed of two livestock commodities contracts (lean hogs and live cattle) traded on U.S. exchanges. Expense Ratio: 0.75% Market Cap: $101 M Top Holdings: Live Cattle (63%), Lean Hogs (37%).
CAFE – iPath Pure Beta Coffee. The Index is comprised of a single exchange traded futures contract, except during the roll period when the Index may be comprised of two futures contracts. Expense Ratio: 0.75% Market Cap: $2 M Top Holdings: Coffee.
There are may commodity ETFs for you to invest in. However a corn ETF may have the best growth rate going forward.
