With so many exchange traded funds (ETFs) in the market today, it’s easy to overlook a few. Did you know that there’s an ETF that invests in agricultural products?
The PowerShares DB Agriculture (DBA) is a broad-based ETF that invests in futures contracts on corn, wheat, soy beans and sugar. It launched in January and follows the Deutsche Bank Liquid Commodity Index. When prices rise for these goods, so should DBA. Recently, prices for agricultural goods have been fairly steady, but with ongoing inflation concerns, will we see DBA rise?
Wheat prices have hit record highs on global equity markets, reports BBC News. China and India are expected to become net importers of corn and wheat, which will have an affect on global inventories and prices. The increased interest and focus on ethanol as a new energy source could also increase corn prices.
DBA has had a volatile year so far, which makes it an interesting ETF to watch. It’s up 6% for the last three months.
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.