As hints of spring have hit parts of the country in recent days while other metropolitan areas struggle with the bitterness of winter and in some cases blizzard conditions, a growing “niche” within ETFs that is undoubtedly tied to weather is that of “Agribusiness.”
The Agribusiness sector really did not exist, not in compact investable form at least, until MOO (Market Vectors Agribusiness, Expense Ratio 0.53%) debuted back in the summer of 2007.
The fund has since grown to nearly $6 billion in size in terms of assets under management, and it averages more than 350,000 shares traded daily. Tracking the DAXglobal Agribusiness Index, top holdings in the fund are names such as Monsanto (8.26%), Syngenta AG (7.37%), and Potash Corp. (6.84%).
Three other ETFs exist within this space, albeit all are much smaller in terms of assets under management at the moment (but all of them are also significantly “newer” to the ETF marketplace).
While MOO undoubtedly has a mega/large cap slant in terms of its portfolio composition (80.61% of the underlying holdings are classified as mega/large cap), PAGG (PowerShares Global Agriculture, Expense Ratio 0.75%), CROP (IndexIQ Global Agribusiness Small Cap, Expense Ratio 0.75%), and VEGI (iShares MSCI Global Agriculture Producers, Expense Ratio 0.39%) are newer alternatives in the Agribusiness space.
PAGG and VEGI both lean to the mega/large cap Agribusiness names as well, like MOO, but as its name suggests, CROP is structured as a small cap fund, with exposure on its top end to names including Nutreco N.V., Smithfield Foods, Nippon Meat Packers, Graincorp Limited, and Nisshin Seifun Group Inc. for example.
Dependent on the exact exposure to Agribusiness that the portfolio manager desires, it is clear that there are a number of ways currently to play the space. It is worth noting that all four of these funds are flirting with multi-year highs, and the newer funds in this space are likely hitting more radars as their live performance data continues to expand (PAGG debuted in 2008, CROP in 2011, VEGI in 2012).
IndexIQ Global Agribusiness Small Cap
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