Despite a persistent drought in California, the largest agriculture state in the U.S., record harvests in other parts of the country are chasing investors from agriculture exchange traded funds and exchange traded notes (ETNs).
Agriculture ETFs were beloved by investors through the first quarter and into the early part of the second quarter as uncooperative weather conditions lifted prices for commodities ranging from coffee to cocoa and fears of depressed supply elevated livestock prices. That sent the PowerShares DB Agriculture Fund (NYSEArca: DBA) higher by 20.5% through the first four months of the year.
It took DBA just two and a half months to rake in over $146 million in assets. A total that as of mid-March represented 10% of the ETF’s assets under management. [Awesome Ag Commodities Lift This ETF]
However, investors’ taste for agriculture commodities funds and ETNs has waned. “After taking in more money than precious metals or energy funds during the first five months of 2014, exchange-traded products backed by agriculture had a net outflow for the year of $57.7 million as of Aug. 29, down 2.9 percent,” reports Megan Durisin for Bloomberg.
To its credit, DBA pulled in $5.24 million in new assets last week, according to PowerShares data, but other agriculture ETFs have been riddled with outflows.
Some investors have also missed out on the epic coffee that has sent shares of the iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN (NYSEArca: JO) up 72.5% this year. Although JO is the best-performing non-leveraged exchange traded product of any type this year, the ETN has shed $109 million in assets. [More Upside for Coffee ETNs]