ETF Spotlight on Market Vectors Agribusiness ETF (NYSEArca: MOO), part of an ongoing series.
Assets: $5.8 billion.
Objective: The Market Vectors Agribusiness ETF tries to reflect the performance of the DAXglobal Agribusiness Index, which is a modified market cap-weighted Index that tracks the movements of companies that engage in the agriculture business and are traded on leading global exchanges.
Holdings: Top holdings include: Potash Corp of Saskatchewan Inc. (NYSE: POT) 8.24%, Monsanto Co. (NYSE: MON) 7.94%, Deere & Co. (NYSE: DE) 7.09%, Syngenta Ag (NYSE: SYT) 6.34% and Wilmar International 6.27%.
What You Should Know:
- MOO has an expense ratio of 0.56%.
- Sector allocations include: Agricultural Chemicals 46.1%, Agriproduct Operations 27.5%, Agricultural Equipment 16.2%, Livestock Operations 7.94% and Ethanol/Biodiesel 2.3%.
- Country allocations include: U.S. 47.9%, Singapore 10.5%, Canada 10.0%, Switzerland 7.9%, Germany 4.49%, Norway 3.8%, Malaysia 3.4%, Japan 3.2%, Hong Kong 2.9%, Chile 1.7%, Indonesia 1.5%, Great Britain 1.1%, Australia 0.8%, Ireland 0.5% and Argentina 0.2%.
- “The index is composed primarily of grain-related agribusiness firms, counting the farmer as a chief customer,” Morningstar analysts write in a profile of the ETF. “The fund owns the world’s largest agribusiness firms, which have had robust growth amid strong demand for grain and other agricultural products from developing nations like China.” [Traders See Volatility in Agribusiness ETF Before Monsanto Results.]
- Morningstar added: “While a sustained drop in grain prices could certainly drive fertilizer prices lower over the coming years, projections of sharp global population increases, the proliferation of biofuels, production concentration in a small number of nations, and a finite allotment of arable land should create upward pressure on those prices in the long run.”
The Latest News:
- Volatile weather conditions have thrown off normal crop schedules, according to The Huffington Post. Farmers are delivering a few weeks late in some areas, according to the report.
- Historically, agriculture equities and related ETFs move most during the last five moths of the year, with average returns over the last 15 periods of 15.5%, Financial Post reports.
- Farmers are projected to experience an increase in revenues, even with signs of weakening grains prices.
- Fertilizer stocks, like Potash Corp and Agrium (NYSE AGU), have been recovering during mid-June — this sub-sector usually bottoms near the end of June and peaks during December. [Small-Cap Agriculture ETF Leverages Food Prices, Population]
For past stories in this series, visit our ETF Spotlight category.
Market Vectors Agribusiness ETF
Max Chen 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.