Exchange traded fund (ETF) provider Van Eck recently launched its Market Vectors Agribusiness ETF (MOO), which encompasses the global agriculture market. It tracks the DAX Agribusiness Index and has a 0.65% expense ratio. MOO holds 40 companies that trade on 13 exchanges worldwide. Companies must be worth at least $150 million to be included in the ETF, reports Index Universe Staff. The U.S. makes up the most of MOO at 55% followed by Canada at 9.3%. Holdings in the ETF include agriculture chemicals at 34%, agriproduct operations at 33.5%, agriculture equipment at 24.3%, livestock operations at 5.6% and ethanol/biodiesel at 2.3%.
Ethanol’s popularity as a new energy source and high wheat prices because of the short supply are a couple of factors that could give this ETF a strong start. Another helpful factor is that MOO is the first ETF to invest directly in agricultural companies. Its only competition comes from the futures contracts-based ETF, PowerShares DB Agriculture Fund (DBA).
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.