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Boring No More: Agriculture and Food Investing Gets A Sexy New ETF

November 15, 2019 7:17 am
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Boring No More: Agriculture and Food Investing Gets A Sexy New ETF

Defiance ETFs, the firm behind such funds as the Defiance 5G Next Gen Connectivity ETF (NYSE:FIVG) and the Defiance NextGen Video Gaming ETF (NYSE:VIDG), added to its lineup Thursday with a more compelling avenue for investing in agriculture and food equities.

What Happened

The Defiance Next Gen Food And Agriculture ETF (NYSE:DIET) debuted as the fourth fund in New York-based Defiance's lineup.

The aptly tickered DIET follows the BlueStar Food and Agriculture Sustainability Index (BFOOD). BlueStar as the index provider for Defiance's other ETFs.

BFOOD “is a rules-based index which seeks to include equity securities of leading global companies whose business activity, products, or services are related to the following industries: Agriculture irrigation systems and connected water meters, plant seed modification, fertilizers and pesticides, sustainable meat/poultry/seafood production, flavors and fragrances for the food industry, livestock feed, pharmaceuticals and veterinary supplies, farming machines and equipment, agricultural services, diagnostic measurement equipment and services for food production and safety, branded meat/poultry/seafood/healthy foods, or branded vegan foods,” according to Defiance.

Why It's Important

DIET's top 10 holdings range in weights of 2.32% to 5.54% and yes, that group includes the once hot Beyond Meat (NASDAQ:BYND). That stock is the new ETF's ninth-largest holding. Other well-known names in DIET include Zoetis (NYSE:ZTS) and International Flavors and Fragrances (NYSE:IFF).

DIET reflects the global nature of the agriculture and food industries with exposure to 21 countries, four of which are classified as emerging markets. The U.S., Norway and Canada combine for over 63% of the new ETF's geographic exposure.

At the industry level, DIET is perhaps broader than some investors would expect a fund of this nature to be with exposure to 10 groups, including food flavors and fragrances, agriculture chemicals, sustainable meat makers and agriculture services providers.

What's Next

Sustainable investing and eating are receiving increased attention this year and both are themes widely expected to be embraced by coveted younger demographics, such as millennials and Gen Z, so it's possible that DIET will prove to be a well-timed new ETF.

It's got at least one point in its favor: an annual fee of just 0.30%, or $30 on a $10,000 investment, which is cheap for a thematic ETF.

Related Links:

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