Agriculture exchange traded products are among the funds enjoying this year’s commodities rebound. Some big name investors are taking note of that theme and embracing exchange traded funds such as the PowerShares DB Agriculture Fund (DBA) .
The PowerShares DB Agriculture Fund tries to reflect the performance of the Diversified Agriculture Index Excess Return, which is comprised of futures contracts on the most liquid and widely tracked agriculture commodities.
DBA, like other commodities products, is benefiting from the slumping U.S. dollar. However, some believe the PowerShares DB U.S. Dollar Index Bullish Fund (UUP) , which tracks the price movement of the U.S. dollar against a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, is poised to rebound. That could make commodities ETFs of all varieties vulnerable to some downside.
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DBA has added $162 million in new assets this year, putting the fund in position to be inflow positive on an annual basis for the first time since 2009, reports the Financial Times, citing PowerShares.
Institutional owners of DBA recently included Harvard’s endowment and a retirement plan for Canadian doctors, according to the FT.
Supporting the commodities outlook, the China, the world’s top consumer of metals, grains and energy, is seeing its economy stabilize. Moreover, the depreciating U.S. dollar has helped support demand for commodities as an alternative hard asset or a better store of wealth.
Commodities have outperformed bonds, currencies and equities this year on speculation over supply disruptions and production cuts that slowly diminished multi-year surpluses, which contributed to the largest price collapse in a generation. Meanwhile, we are also seeing demand improving.
For more news and strategy on the Agriculture market, visit our Agriculture category .
PowerShares DB Agriculture Fund