Revisiting Agriculture ETFs

agriculture etfsAgriculture produced the hottest stocks in 2007 and leading companies such as Potash and Mosaic have held on to their gains so far in 2008.

Investors interested in agriculture ETFs have several options to choose from. Our favorite ticker symbol in the group is associated with Van Eck Global’s Market Vectors Agribusiness ETF (MOO). With over $1 billion under management, MOO tracks the total return performance of the DAXglobal® Agribusiness Index. The Index provides targeted exposure to 40 companies worldwide that are engaged in the agriculture business. The top 5 constituents as of Feburary 7 were Mosaic (NYSE: PBO), Potash (NYSE: POC), Monsanto (NYSE: MON), Archer-Daniels-Midland (NYSE: ADM) and Deere (NYSE: DCO).

The Powershares DB Agriculture Fund (DBA) takes a different approach using a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities – corn, wheat, soy beans and sugar (the Deutsche Bank Liquid Commodity Index – Optimum Yield Agriculture Excess Return™ Index.)

You can also go to the London Stock Exchange and check out ETF Securities’ Agriculture ETF (LSE: AIGA.L) which is designed to track the DJ-AIG Agriculture Sub-Index. AIGA tracks a commodity index rather than a portfolio of equities and is able to short. However, there’s no getting away from the dollar which is AIGA’s base currency.

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We are also preparing a special report on Investing in Agriculture with ETFs. To receive the report, please subscribe to our e-mail list.

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