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 CORN, SOYB, and RJA.
  • The top holdings of these ETFs are futures contracts for corn, soybeans, and wheat, 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). These ETFs provide exposure to agricultural commodities, not agricultural companies. Agricultural commodities, as measured by the S&P GSCI Agriculture Index, have outperformed the broader market with a total return of 73.6% over the past 12 months compared to the S&P 500's total return of 50.0%, as of May 6, 2021. The best-performing agricultural commodity ETF for Q3 2021, based on performance over the past year, is the Teucrium Corn Fund (CORN). We examine the top 3 best agricultural commodity ETFs below. All numbers below are as of May 7, 2021.

Teucrium Corn ETF (CORN)

  • Performance over 1-Year: 91.4%
  • Expense Ratio: 1.11%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 392,014
  • Assets Under Management: $193.8 million
  • Inception Date: June 9, 2010
  • Issuer: Teucrium

CORN is structured as a commodity pool, an investment vehicle that pools investors' assets to invest in futures contracts. The fund provides exposure to the price of one of the most important agricultural commodities. Corn is used as feed, fuel, starch, sweetener, and even plastic. Investors may find CORN appealing as a hedge against inflation or simply as a tactical tilt towards a specific segment of the agricultural market within a broader portfolio. The fund's sole holding is corn futures contracts of multiple maturities.

Teucrium Soybean (SOYB)

  • Performance over 1-Year: 77.7%
  • Expense Ratio: 1.15%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 110,273
  • Assets Under Management: $93.7 million
  • Inception Date: Sept. 19, 2011
  • Issuer: Teucrium

Like CORN above, SOYB is a commodity pool, pooling investor assets in order 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: 73.0%
  • Expense Ratio: 0.75%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 212,856
  • Assets Under Management: $141.8 million
  • Inception Date: Oct. 17, 2007
  • Issuer: Swedish Export Credit Corp.

RJA is structured as an exchange-traded note (ETN), a type of unsecured debt security similar to a bond but which does not make interest payments and trades on an exchange like a stock. The fund aims to replicate the performance of the Rogers International Commodity Index - Agricultural Total Return. The index is considered a well-known commodity benchmark and represents the value of a group of 20 agricultural 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.

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