Although most commodity ETFs, or exchange-traded funds, are said to do quite well in today’s prevailing market conditions, agriculture ETFs seem do even better. In particular, PowerShares ETF appears to excel over most other ETFs offered in the market. Ever since the first month of 2007, when this fund was launched, it has progressively shown a return of over 50%. During this same period, the S&P 500 ended up by over 5% down. This fund is among one of the several other agriculture ETFs on the market and so far most of them appear to perform excellently.
According to some industry analysts, a common trend appears to generally dictate that overall agriculture ETFs go up as the stock market begins to decline. Under the prevailing conditions, would hedging his portfolio mainly with some agriculture ETFs logically make good sense to a potential investor? Well, that would entirely depend on his ability to predict the direction of the stocks he owns and also whether he believes they are performing well enough by themselves. When he ascertains that the stock market appears to be actually declining, it may make sense to look more closely at some commodity ETFs, especially those related to agriculture.
Demand and supply of agriculture products provides the key as to why commodity ETFs appears to be performing particularly well. Demand for crops in most parts of the world, especially by countries that have huge populations to feed, such as India and China, is extremely high. As such, they must get their food supplies shipped to them, simply because they are either unable to keep up the supply or are forecasting future needs. Increasing awareness in overall health care and education in most parts of the world today is simultaneously raising the demand for more grains and cereals.
Under these conditions, agriculture ETFs seem to be all about correctly predicting future needs and industry experts see this increase in these funds as an ongoing trend. Most consumers may not be particularly pleased with increases in oil prices which in turn cause costs to rise in their local grocery stores. No one is particularly happy with devastations caused by erratic anomalies in the weather, which appears to be the result of global warming and other natural disasters. However, investors in commodity or agriculture exchange-traded funds certainly see a silver lining between these disturbing clouds.
Even the best experts cannot claim to predict the future with certainty, although a large number among them may appear to do a reasonably fine job of making a strenuous attempt. However, many of them are of the opinion that the coming future holds a good promise for a number of commodity ETFs. In particular, agriculture ETFs are being given a more positive nod by experts. Should an investor have invested in agriculture ETFs way back when they were first launched in 2007, he would be well aware of their potential and what exactly they have done for the positive benefit of his portfolio. However, if he has not given the commodity ETFs a serious thought, this may be the best time to try them.
Agriculture ETF list:
- PowerShares DB Agriculture Fund (DBA) Top 100
- Dow Jones-AIG Agriculture Total Return ETN (JJA)
- E-TRACS CMCI Agriculture ETN (UAG)
- E-TRACS CMCI Food ETN (FUD)
- ELEMENTS Rogers International Commodity – Agriculture Index ETN (RJA)
- iPath Dow Jones-AIG Softs Total Return Sub-Index ETN (JJS)
- PowerShares DB Agriculture Double Long ETN (DAG)
- PowerShares DB Agriculture Double Short ETN (AGA)
- PowerShares DB Agriculture Long ETN (AGF)
- PowerShares DB Agriculture Short ETN (ADZ)
- BMO Agriculture Commodities Index ETF (ZCA-TSX) NEW!
- ETFS Agriculture ETF (AIGA-LSE)
- ETFS Agriculture Sterling ETF (AGAP-LSE)
- ETFS Forward Agriculture ETF (FAGR-LSE)
- ETFS Forward Softs ETF (SOFF-LSE)
- ETFS Leveraged Agriculture ETF (LAGR-LSE)
- ETFS Leveraged Softs ETF (LSFT-LSE)
- ETFS Short Agriculture ETF (SAGR-LSE)
- ETFS Short Softs ETF (SSFT-LSE)
- ETFS Softs ETF (AIGS-LSE)