ETF Trends
ETF Trends

Yesterday we focused on DBA (PowerShares Agriculture, Expense Ratio 0.85%) which was actually down at the time of the dissemination of our report, and then staged an impressive >2% rally throughout the rest of the session, by far its largest one day move of 2015 and then some.

The fund is now within shouting distance of its 200 day MA overhead, a level not seen in quite some time. DBA has seen modest inflows in the trailing one month period, with about $31 million entering the fund via creation activity. DBA is not alone in picking up momentum lately, as ETF provider Teucrium pointed out to us, which we have also noticed, accelerated trading activity in their broad based Agricultural fund TAGS (Teucrium Agricultural Fund, Expense Ratio 0.50%) which for a rather long time sat as a fairly dormant fund in terms of day to day volume.

For basically the entire months of May and June, TAGS has traded at a high multiple of its typical average daily volume, and continued to do so yesterday, with more than 40,000 shares trading as the fund impressively eclipsed its 200 day MA and has held there today.

There is clearly bullish interest in the Agriculture space, exhibited through this recent action in related ETFs like TAGS and DBA, and given the seasonality factors that influence Agricultural commodity prices, there is no reason to believe that this slows down at any point soon.

According to fund literature, TAGS “provides investors exposure to four core agricultural commodities, namely corn, wheat, soybeans, and sugar, without the need for a futures account. TAGS invests directly in shares of the following four Teucrium funds: CORN (Teucrium Corn Fund, Expense Ratio 2.92%), SOYB (Teucrium Soybean Fund, Expense Ratio 1.00%), WEAT (Teucrium Wheat Fund, Expense Ratio 3.74%), and CANE (Teucrium Sugar Fund, Expense Ratio 1.77%).

So in essence, the product is an ETF of ETFs, and unlike DBA, hones in on only four agricultural commodities whereas DBA has a broader spectrum of futures exposure. TAGS remains small in terms of asset size in spite of the large uptick in trading volume lately, as we only see $1.5 million in AUM at the moment, however this can of course change at short notice especially given the clear increase in interest not only in the product but the space in general.

Teucrium Agricultural Fund

For more information on Street One ETF market commentary and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com

Street One Financial is an educational/research firm utilizing the Broker Dealer services of Precision Securities, a FINRA registered Broker/Dealer.