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 to instead 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 agricultural exchange-traded funds (ETFs) with the best one-year trailing total returns are CORN, SOYB, and RJA.
  • The top holdings of these ETFs are futures contracts for corn, soybeans, and wheat, respectively.

Six distinct agricultural commodity ETFs trade in the United States, 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 55.2% over the past 12 months compared to the S&P 500’s total return of 35.2%, as of Aug. 2, 2021. The best-performing agricultural commodity ETF for the fourth quarter (Q4) of 2021, based on performance over the past year, is the Teucrium Corn Fund (CORN).

We examine the three best agricultural commodity ETFs below. All numbers are as of Aug. 2, 2021.

Teucrium Corn Fund (CORN)

  • Performance Over One-Year: 75.9%
  • Expense Ratio: 2.19%
  • Annual Dividend Yield: N/A
  • Three-Month Average Daily Volume: 415,252
  • Assets Under Management: $135.7 million
  • Inception Date: June 9, 2010
  • Issuer: Teucrium Trading

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 toward a specific segment of the agricultural market within a broader portfolio. The fund’s holdings are comprised solely of corn futures contracts of multiple maturities.

Teucrium Soybean Fund (SOYB)

  • Performance Over One-Year: 63.0%
  • Expense Ratio: 2.50%
  • Annual Dividend Yield: N/A
  • Three-Month Average Daily Volume: 110,151
  • Assets Under Management: $58.2 million
  • Inception Date: Sept. 19, 2011
  • Issuer: Teucrium Trading

Like CORN, SOYB is a commodity pool, pooling 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. SOYB’s holdings are composed exclusively of soybean futures.

Elements Linked to the Rogers International Commodity Index — Agriculture Total Return ETN (RJA)

  • Performance Over One-Year: 51.1%
  • Expense Ratio: 0.75%
  • Annual Dividend Yield: N/A
  • Three-Month Average Daily Volume: 198,414
  • Assets Under Management: $128.4 million  
  • Inception Date: Oct. 17, 2007
  • Issuer: Government of Sweden

RJA is structured as an exchange-traded note (ETN), a type of unsecured debt security that is similar to a bond but that 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 — Agriculture Total Return. This 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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