Market Overview

Agriculture ETF


Exchanged traded funds are (ETFs) are securities that track on an index, a commodity, or a basket of assets like an index fund, but ETFs trade like stock on the major stock exchanges. The agriculture ETF is typically considered an agricultural commodity exchanged traded fund and it generally tracks the performance of commodity stocks. In particular this ETF tracks those commodity stocks that are related to food or the growing of food and other agricultural commodities.

Due to stock analysis of the ETF market, there seems to be a trend in which agriculture exchange traded funds increase as the stock market declines. As you can imagine with the current stock market, analysts were taking a look at the commodity ETFs and they were looking at the agriculture ETF in particular. Many say that future trading of commodity ETFs looks pretty good, and as a result, many individuals are looking to invest in agricultural exchange traded funds in particular.

There are two ETF funds that are considered agricultural commodity ETFs that individuals can invest in. These include the Market Vectors Global Agribusiness ETF (AMEX: MOO) and the PowerShares DB Agriculture ETF (AMEX: DBA). The MOO ETF is invests directly in agriculture stocks and agriculture related stocks and the DBA ETF invests in futures contracts on numerous agriculture commodities such as wheat, soy beans, sugar, and corn. The DBA if more actively traded than the MOO and it has also outperformed the MOO by quit a margin. It has also been around longer than the MOO. What is neat about exchange traded funds is that they are often duplicated or investors see very similar ETF launches.

The agriculture ETF is an emerging market that many expect will only continue to grow and to prosper along with income levels in those countries whose quality of life improves. With this better quality of life comes a demand for meat and dairy products, animal feed, etc.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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