Exchange traded funds (ETFs) have made investing easier for the individual investor. Through ETFs, investors can gain exposure to markets that were, in the past, impractical to buy into. Teucrium Trading LLC is looking to continue that trend by introducing a slew of new commodity based ETFs.
According to Olivier Ludwig of Index Universe, Teucrium Trading LLC recently “filed reams of paperwork with the Securities and Exchange Commission to expand further into the world of commodities ETFs.” Teucrium is a Vermont based firm that just rolled out a corn based ETF last month: The Teucrium Corn Fund (NYSEArca: CORN).
Commodities ETFs are good for individual investors because they “allow easier access to materials than directly obtaining their investment exposure through various futures markets.” [7 Commodity ETFs You Should Know About.]
One advantage to Tecrium’s funds is that they employ a strategy that can help mitigate the effects of contango. Contango is a situation “in which futures with further-out expiration dates cost more than those with nearer expiration dates.”
Contango can hinder returns because “managers have to pay up when they “roll” positions from lower-priced expiring contracts to higher-priced later-month ones to maintain exposure.”
Teucrium has indicated that all funds will trade on the NYSE. The proposed funds are as follows:
- The Teucrium WTI Crude Oil Fund (NYSEArca: CRUD)
- The Teucrium Natural Gas Fund (NYSEArca: NAGS)
- The Teucrium Sugar Fund (NYSEArca: CANE)
- The Teucrium Soybean Fund (NYSEArca: SOYB)
- The Teucrium Wheat Fund (NYSEArca: WEAT)
For more stories on commodity ETFs, visit our commodity category.
Sumin Kim contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.