This text/publish incorporates references to services or products from a number of of our advertisers or companions. We could obtain compensation while you click on on hyperlinks to these services or products
Agriculture, meals, and associated industries make up about 5% of the U.S. GDP, whereas America’s farms make up about 0.6%.
As such an essential a part of the economic system, it’s straightforward to see why agriculture is such a well-liked funding. And top-of-the-line methods so as to add this important trade to your portfolio is with exchange-traded funds (ETFs).
On this article, we’re rounding up 5 of the very best farmland and agriculture ETFs.
5 Farmland ETFs to Watch in 2022
Farmland ETF | Ticker | Holdings |
---|---|---|
Invesco DB Agriculture Fund | DBA | Diversified agriculture commodities futures, Treasury securities, cash market funds, and Treasury Invoice ETFs |
Teucrium Wheat Fund | WEAT | Wheat futures |
ELEMENTS Linked to the Rogers Worldwide Commodity Index – Agriculture Whole Return | RJA | Diversified agriculture commodities futures |
Teucrium Agricultural Fund | TAGS | Diversified agriculture commodities futures |
iPath Sequence B Bloomberg Agriculture Subindex Whole Return ETN | JJA | Diversified agriculture commodities futures |
(Observe: All knowledge relating to inventory costs and market capitalization is as of the shut of buying and selling on Wednesday, July 27, 2022.)
1. Invesco DB Agriculture Fund (DBA)
- Present Worth: $19.80
- 12-Month Excessive: $23.01
- 12-Month Low: $18.32
- Internet Property: $1.84 billion
The Invesco DB Agriculture Fund tracks adjustments within the DBIQ Diversified Agriculture Index Extra Return, plus curiosity revenue from the fund’s holdings in Treasury securities, cash market funds, and Treasury Invoice ETFs. This fund provides buyers a strategy to achieve publicity to commodities futures throughout your complete agricultural trade.
DBA is among the hottest agriculture and farmland ETFs, because of its diversification. The ETF worth has grown steadily over the previous 5 years, and whereas it’s down from its 12-month excessive, it’s buying and selling at the next worth than it was one 12 months in the past.
2. Teucrium Wheat Fund (WEAT)
- Present Worth: $8.22
- 12-Month Excessive: $12.75
- 12-Month Low: $6.64
- Internet Property: $477.63 million
A lot of the ETFs on our record have broad agriculture publicity, that means you’ll be able to put money into many components of the agriculture trade without delay. The Teucrium Wheat Fund is the one one on our record that invests in a single a part of the trade — wheat. This ETF invests in wheat futures, permitting buyers to earn money from probably the most essential agricultural merchandise.
The Teucrium Wheat Fund was created in 2011 and is among the largest agriculture ETFs. The fund has remained pretty stage for the previous 5 years however has seen a lift over the previous 12 months.
3. ELEMENTS Linked to the Rogers Worldwide Commodity Index – Agriculture Whole Return (RJA)
- Present Worth: $8.98
- 12-Month Excessive: $11.03
- 12-Month Low: $7.56
- Internet Property: $153.05 million
This ETF tracks the efficiency of the Rogers Worldwide Commodity Index – Agriculture Whole Returns. This index incorporates a basket of 21 agriculture commodity futures contracts. Due to the numerous various kinds of agriculture commodities included, buyers can achieve diversified publicity to the agriculture and farmland trade.
This ETF has seen main development within the 5 years because it was created. Moreover, the fund’s day by day whole return over the previous 12 months is 14.16%.
4. Teucrium Agricultural Fund (TAGS)
- Present Worth: $29.49
- 12-Month Excessive: $37.91
- 12-Month Low: $25.35
- Internet Property: $47.41 million
The Teucrium Agricultural Fund is a broad agricultural fund that features publicity to corn, wheat, soybeans, and sugar futures, that are among the many most essential agricultural merchandise within the U.S. This fund is one in all many agricultural funds that Teucrium provides, and the one one that provides a diversified portfolio of agricultural merchandise.
The Teucrium Agricultural Fund was created in 2012. The fund is definitely priced decrease immediately than it was when it was created. After its creation, the fund went by means of a downward development that lasted a number of years. However the worth has been rising over the previous 5 years, and the value immediately is significantly greater than it was only one 12 months in the past.
5. iPath Sequence B Bloomberg Agriculture Subindex Whole Return ETN (JJA)
- Present Worth: $23.89
- 12-Month Excessive: $38.48
- 12-Month Low: $19.96
- Internet Property: $11.21 million
The iPath Sequence B Bloomberg Agriculture Subindex Whole Return ETN supplies publicity to the Bloomberg Agriculture Subindex Whole Return, which is made up of seven totally different futures contracts on agricultural commodities. The ETN is technically an unsecured debt obligation, that means it brings totally different dangers than investing immediately in commodities futures contracts.
This ETN was created in 2018. Within the 4 years because it was created, the fund’s worth has truly remained pretty stage. Whereas its efficiency over the previous month has been removed from stellar, it has a one-year return of 8.28%.
Different Methods to Put money into Farmland
Farmland — and agriculture basically — has lengthy been a well-liked funding possibility, however it’s turn out to be more and more straightforward for buyers to entry because of ETFs and different forms of funds. Farmland has a protracted historical past of constructive returns, whether or not you’re investing immediately within the land itself or within the crops that develop on it.
When you’re excited about investing within the agriculture trade, ETFs aren’t your solely possibility. Let’s discuss a number of options.
Farmland Crowdfunding
Crowdfunding platforms are getting used throughout all industries to assist buyers pool their cash collectively, however they’re significantly helpful with regards to giant investments like actual property.
There are a number of crowdfunding platforms designed particularly for farmland. Examples embrace AcreTrader, FarmTogether, and FarmFundr. Once you make investments by means of one in all these websites, you turn out to be a partial proprietor of a chunk of farmland and might revenue both from the sale of the land, the hire somebody pays to farm the land, or the crops themselves.
Some Farmland crowdfunding web sites are solely open to accredited buyers, that means you’ll want a web value of at the very least $1 million or an revenue of at the very least $200,000 (or $300,000 between you and a partner).
Study extra about actual property crowdfunding platforms.
Farmland REITs
One other strategy to make investments not directly in farmland is thru actual property funding trusts (REITs). Once you purchase REITs, you’re shopping for shares of inventory in an organization that owns and manages actual property. In return, you may make a return in your funding from the corporate’s earnings. A good thing about REITs is that they share among the engaging options of shares, together with their liquidity and the flexibility to promote them afterward for a revenue.
Agriculture Mutual Funds
Mutual funds are much like exchange-traded funds (ETFs) in that many buyers pool their cash collectively to achieve publicity to a diversified number of underlying belongings. Simply as there are ETFs dedicated to agriculture and farmland, there are many mutual funds that obtain the identical aim. Most frequently, these funds put money into the crops that farmland creates quite than the land itself.
Get began >> Greatest Brokers for Mutual Funds for 2022
Agriculture Shares
A closing strategy to make investments not directly in farmland is by buying agriculture shares. Identical to with ETFs and mutual funds, these shares don’t can help you put money into farmland itself. As an alternative, they allow you to put money into the businesses and merchandise within the agriculture trade.
Nonetheless, there are some downsides to purchasing agriculture shares. Once you purchase a share of inventory, you’re investing in a single firm. Somewhat than benefiting from your complete agriculture trade — and even part of it — you’re basically selecting winners and losers.
And even when the trade has 12 months, the corporate you’ve invested in may not. Agriculture ETFs, then again, can help you achieve publicity to extra of the market.
The Backside Line: Ought to You Put money into Farmland?
The agriculture trade is among the cornerstones of the U.S. economic system. And whereas most of us could not reside or work on farms, we are able to nonetheless profit from farming by means of our investments.
In line with AcreTrader, U.S. farmland has produced common returns of 12.24% over the previous 20 years. When you purchased land for $10,000 in 2000, it might be value greater than $96,000 immediately. Contemplating the typical annual return of the U.S. inventory market is about 10%, it’s straightforward to see why farmland is such a beautiful funding.
Whereas farmland is a traditionally good funding, it’s troublesome to speculate immediately in. The excellent news is there are many different methods to not directly put money into agriculture, together with agriculture shares, farmland ETFs, mutual funds, REITs, and farmland crowdsourcing. So you’ll be able to put that shovel away.
Identical to the rest, it’s not sensible to place your total portfolio into farmland or agriculture. However allocating at the very least a portion of your portfolio to this trade can add diversification to your portfolio and assist mitigate your losses when different investments will not be performing as effectively.
Get your arms soiled (with out getting your arms soiled) with our guides>>