Agricultural commodities like corn, soybeans, and wheat are essential to the food supply, thus spawning a giant global commodities market to buy and sell them. However, individual agricultural commodities are subject to dramatic volatility related to factors including weather, season, population, and more. Investors looking for exposure to agricultural commodities may prefer, instead, to own an agriculture-focused exchange-traded fund (ETF). These ETFs provide diversification by investing in futures contracts of a range of different commodities, or by diversifying the maturity of the futures contracts held for a single commodity.

Key Takeaways

  • Agricultural commodities outperformed the broader market over the past year.
  • The ETFs with the best 1-year trailing total return are SOYB, RJA, and CORN.
  • The top holdings of these ETFs are futures contracts for soybeans, wheat, and corn, respectively.

There are 6 distinct agricultural commodity ETFs that trade in the U.S., excluding inverse and leveraged funds as well as funds with less than $50 million in assets under management (AUM). Agricultural commodities, as measured by the S&P GSCI Agriculture Index, have outperformed the broader market with a total return of 25.2% over the past 12 months compared to the S&P 500's total return of 19.1%, as of February 1, 2021. The best-performing agricultural commodity ETF, based on performance over the past year, is the Teucrium Soybean ETF (SOYB). We examine the best agricultural commodity ETFs below. All numbers below are as of February 2, 2020.

Teucrium Soybean (SOYB)

  • Performance over 1-Year: 39.0%
  • Expense Ratio: 1.15%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 172,762
  • Assets Under Management: $94.1 million
  • Inception Date: September 19, 2011
  • Issuer: Teucrium

SOYB is structured as a commodity pool, an investment vehicle that pools investor assets to invest in futures contracts. The ETF provides exposure to a single agricultural commodity, soybeans. Soybeans have a number of uses, including as feed, oils, wood substitutes, foam, ink, and crayons. Because of SOYB's narrow focus on a single commodity, the fund may be attractive to investors looking to make a short-term tactical play on one segment of the agricultural commodities market, rather than as part of a long-term buy-and-hold strategy. The holdings of SOYB are exclusively comprised of soybean futures.

RICI-Agriculture ETN (RJA)

  • Performance over 1-Year: 26.7%
  • Expense Ratio: 0.75%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 184,892
  • Assets Under Management: $118.3 million
  • Inception Date: October 17, 2007
  • Issuer: Swedish Export Credit Corporation

RJA is an exchange-traded note (ETN) that aims to replicate the performance of the Rogers International Commodity Index - Agricultural Total Return. The index holds a basket of roughly 20 commodities futures. As an ETN, RJA exposes investors to the credit risk of the issuing institution but also avoids issues related to tracking error. With its narrow focus, RJA is typically used as a short-term tactical investment tool to gain exposure to the agricultural commodities space. The top three holdings of RJA are futures contracts of wheat, corn, and cotton.

Teucrium Corn Fund (CORN)

  • Performance over 1-Year: 17.6%
  • Expense Ratio: 1.11%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 258,316
  • Assets Under Management: $137.6 million
  • Inception Date: June 9, 2010
  • Issuer: Teucrium

Like SOYB above, CORN is a commodity pool that groups investor assets to invest in futures contracts. While SOYB focuses on soybean futures, CORN targets corn futures. CORN is unique among similar funds in that it diversifies across multiple maturities. Also, given the importance of corn as a commodity, this fund has unique potential as an inflation hedge and for providing a tactical tilt toward an important corner of the agriculture market. The sole holding of CORN is corn futures contracts.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.