Teucrium Trading, the manager behind the corn exchange traded fund, has launched the first ETF to track the prices of soybeans.
The firm has also listed ETFs for sugar and wheat in the face of a tough market for agriculture ETFs in recent weeks. PowerShares DB Agriculture Fund (NYSEArca: DBA) is down about 4% over the past month.
“We are happy to expand our line of agricultural exchange traded products within Teucrium’s growing family so that investors may gain access to some of the world’s most important agricultural commodities without having to open a futures account,” Sal Gilbertie, president of Teucrium Trading, commented.
“The Teucrium sugar, soybean and wheat ETPs are modeled after our successful corn ETP, now giving investors the ability to add four of the world’s most important agricultural commodities to their investment portfolios,” Gilbertie added. “Teucrium’s slate of single commodity agricultural and energy ETP products has expanded today allowing investors direct access to these commodities through the use of New York Stock Exchange traded products.”
The three new ETFs include:
- According to a regulatory filing, Teucrium Soybean Fund (NYSEArca: SOYB) will hold a mix of three different soybean futures contracts, including the second-to-expire contract at 30%, the third-to-expire contract weighted at 30%, and the contract expiring in the March following the expiration month of the third-to-expire contract at 35%.
- Teucrium Sugar Fund (NYSEArca: CANE) will also hold a blend of futures contracts for “Sugar No. 11.” The fund holds the second-to-expire sugar futures contract weighted at 35%, the third-to-expire contract weighted at 30% and the contract expiring in the March following the expiration month of the third-to-expire contract, weighted at 35%.
- Teucrium Wheat Fund (NYSEArca: WEAT). WEAT holds the second-to-expire wheat contract weighted at 35%, the third-to-expire contract weighted at 30% and the contract expiring in the December following the expiration month of the third-to-expire contract, weighted at 35%.
The three new funds all have an annual expense ratios of 1.00%.
By spreading out holdings across multiple maturity dates, the funds will help mitigate the effects of backwardation and contango on the performance and better reflect the price movements of the underlying commodities. Contracts generally expire on a specified day in seven different months, including January, March, May, July, August, September and November. [Commodity ETFs: Understanding Contango]
“Until today, investors without the ability to trade futures could only access four of the world’s most important agricultural commodities through broad commodity indices or through certain Exchange Traded Notes,” Gilbertie noted. “Teucrium has now provided investors with liquid, unleveraged, transparent, single-commodity ETPs through which they may allocate, corn, soybeans, wheat and sugar into their investment portfolios.”
Since the funds are structured as publicly traded partnerships, investors will need to file a K-1 form when tax season comes around.
PowerShares DB Agriculture Fund
NOTE: Investors may also sign up for the Teucrium agricultural commodities webinar here for more.
For more information on new ETFs, visit our new ETFs category.
Max Chen contributed to this article.