Hedge funds and proprietary trading firms are bolstering their rosters with added expertise in agricultural commodities. Given last year’s volatility, they’re seeing opportunities for profit-taking, especially amid a number of broad economic unknowns.
Of course, inflation remains a key concern, so agricultural commodities can offer an ideal inflation hedge, especially given that it could stick around for some time as the Fed continues tinkering with interest rate policy. Whatever the reason, hedge funds and prop firms are hoping that last year’s volatility in the ag commodities market will spill into this year and offer profitable trading opportunities.
“Hedge funds and proprietary trading firms are beefing up agricultural markets expertise by hiring traders as big swings in prices have made even relatively niche corners of commodities trading lucrative during the past year,” a Bloomberg report said.
Movers and shakers in the hedge fund industry are bringing on talent specific to ag commodities. With various market forces affecting ag commodities, getting expertise in this sub-sector of the capital markets is imperative for success.
“Prominent moves include Squarepoint Capital LLP’s January hire of Olivier Paturaud from Louis Dreyfus Co., where he headed sugar trading in Asia, and Millennium Management’s hiring of soft commodities specialist Jonathan Kroft from Citadel late last year, according to people familiar with the changes. Marshall Wace brought on Neil Smaldon, who has an agriculture background, as the firm’s head of discretionary commodities,” the report added.
Follow Bets on Ag Commodities
Investors who want to follow hedge funds and prop firms’ bets on ag commodities this year can opt for funds to get broad exposure. If not, there are opportunities to trade individual funds that focus on a specific commodity if they sense bullishness.
For easy, convenient broad-based exposure, consider the Teucrium Agricultural Fund (TAGS). It offers an ideal option to get ag commodities exposure without having to hold various commodities for diversification purposes.
TAGS is essentially a fund of funds, and it features a low 0.13% expense ratio, combining exposure to corn, wheat, soybeans, and sugar through other Teucrium funds that focus specifically on these commodities.
Below are the funds featured in TAGS:
- The Teucrium Corn Fund (CORN)
- The Teucrium Wheat Fund (WEAT)
- The Teucrium Soybean Fund (SOYB)
- The Teucrium Sugar Fund (CANE)
As mentioned, if investors want specific exposure to a particular commodity, such as corn, wheat, soybeans, or sugar, they can invest in those funds individually.
For more news, information, and analysis, visit the Commodities Channel.