ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Commodities Channel
  2. Lara Crigger Explores Agricultural Commodities ETFs
Commodities Channel
Share

Lara Crigger Explores Agricultural Commodities ETFs

Evan HarpAug 24, 2022
2022-08-24

VettaFi editor-in-chief Lara Crigger appeared in Sowing Seeds: The Popularity of Agricultural Commodities ETFs to discuss commodities for The Money Show’s ETF Investing Virtual Expo.

Agricultural commodities have had a big year as inflation surged and scarcity issues brought about by supply chain strain and geopolitical conflict have inspired investors to explore agricultural commodities ETFs. Agricultural funds, such as the Invesco DB Agriculture Fund (DBA A) and the Teucrium Corn Fund (CORN B) represent just a tiny pocket of the commodities ETF landscape. Crigger noted that “at the same time, however, assets in this sleepy corner of the ETF land have grown tremendously lately. Over $1 billion in new net cash has gone into these ETFs year-to-date.”

On the VettaFi Category Tracker, agricultural commodities have seen a huge spike of interest and research in the first half of the year, becoming the third most popular category behind only broader commodities and real estate.

Lara Crigger Explores Agricultural Commodities ETFs

The Russian invasion of Ukraine has been a big catalyst for agricultural performance, as both countries account for 15% of the world’s corn production, 30% of the world’s wheat production, and 80% of its sunflower oil. Crigger noted that “while the Russia-Ukraine war was a significant part of the story behind agricultural commodities ETFs’ recent performance, it’s not the whole story.” Crigger pointed to DBA’s performance, which had a compelling upward trajectory before the war started.

Crigger explained that “the pandemic wasn’t the only driver here. But it was a stone in the lake, causing ripples outward. The pandemic led to lockdowns — one ripple — which led to disruptions in energy production and supply, including in oil and oil byproducts, another ripple. Disruptions in oil supply led to a reduced supply of petroleum-based fertilizer — yet another ripple. Less fertilizer means fertilizer becomes more expensive, which leads to rising cost of production for growing pretty much every crop on the planet, which in turn leads to rising food prices, and of course inflation. Ripple, ripple, ripple.”

In the past few months, there has been some relief, with food prices slipping 8.6% in July, but the United Nations is anticipating that this price won’t hold.


Content continues below advertisement

Reasons to Get Into Agricultural Commodities

It could be easy for investors to believe that they’ve missed the window on commodities, but Crigger noted several reasons that agricultural commodities are worth considering. “Data shows that agricultural commodities possess low correlations to stocks and bonds — and even to other commodities,” Crigger said, noting their value as a diversification tool. Crigger also pointed out that Teucrium’s research shows that four of the last five major market corrections of greater than 10% have resulted in agricultural commodities outperforming broad large-cap stocks.

Another factor to consider is inflation. Though many people think we might have hit peak inflation, according to Crigger food prices are likely to remain elevated due to the weather. “The roots of the high food prices that we’re currently seeing start not with the Russia-Ukraine war or even with supply chain challenges that kept barges locked in port for the better part of two years, but with the 2019-2020 growing season. That was the first year of the La Nina weather phenomenon.”

Between changing global climates and geopolitical tensions, Crigger sees agricultural commodities as being a compelling investment in the medium term. There is a range of options investors can explore, from single commodity ETFs to commodity basket ETFs, to ETNs.

Lara Crigger Explores Agricultural Commodities ETFs

For more news, information, and strategy, visit the Commodities Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X