Global investment firm Goldman Sachs is beating the drum on commodities harder than ever despite recessionary risks. In fact, the firm thinks that risks of a recession could be overblown, noting that an energy crisis and strong fundamentals are making the case for getting commodities exposure.
“Our economists view the risk of a recession outside Europe in the next 12 months as relatively low,” said Goldman Sachs analysts including Sabine Schels, Jeffrey Currie, and Damien Courvalin, according to a Bloomberg report. “With oil the commodity of last resort in an era of severe energy shortages, we believe the pullback in the entire oil complex provides an attractive entry point for long-only investments.”
Amid rising inflation, commodities were highly sought after as an inflation hedge. Additionally, a global food crisis spurred by Russia’s invasion of Ukraine helped to propel commodities to the moon, but they’ve come back down to earth, making them a potential value play.
There are a plethora of ways investors can get commodities exposure, such as targeting a specific commodity or going for an all-inclusive approach. When it comes to the latter, exchange traded funds (ETFs) that offer a blanket approach are ideal, and ETF provider Teucrium has two worth considering.
2 Ways to Get Broad Exposure
Investors looking to get commodities exposure can consider a pair of exchange traded funds (ETFs) from Teucrium. Getting exposure via ETFs means that investors don’t have to hold various positions to get diversification in commodities.
Investors can have it all in the convenience of one ETF: the Teucrium Agricultural Fund (TAGS). The fund combines exposure to corn, wheat, soybeans, and sugar through other Teucrium ETFs that focus specifically on these commodities, essentially offering investors a fund of funds.
Funds featured in TILL:
- The Teucrium Corn Fund (CORN)
- The Teucrium Wheat Fund (WEAT)
- The Teucrium Soybean Fund (SOYB)
- The Teucrium Sugar Fund (CANE)
Another fund to consider is the Teucrium Agricultural Strategy No K-1 ETF (TILL), which provides investors with long-only futures price exposure to corn, wheat, soybeans, and sugar. One difference with TILL is that it does not issue a K-1 tax form, but rather a 1099 form.
TILL will hold one futures contract in each of the four markets (corn, wheat, soybeans, and sugar) excluding the front-month (aka spot) contract. TILL is also an actively managed fund, giving investors more dynamic exposure to the markets than that of TAGS.
For more news, information, and strategy, visit the Commodities Channel.