Hedge Funds Focusing on Commodities Are Having a Strong Year

Wall Street bets on commodities this year have been producing some nice gains despite the stock market heading downward for the first three quarters of 2022. Commodities have been one of the few bright spots when it comes to asset classes, and they could continue gaining strength through the rest of the year.

Consumers have been dealing with rising prices through 2022 as the U.S. Federal Reserve has scrambled to adjust monetary policy with a sustained tightening in order to tame inflationary pressures. In the meantime, Wall Street traders have been placing bets on commodities, banking on the prediction that prices will keep trending higher through the end of the year and even possibly beyond that.

“Some hedge funds that trade raw materials have generated blockbuster returns this year, making them among the major beneficiaries of exceptionally volatile commodity markets,” a Wall Street Journal report noted.

“Prices for oil, natural gas, metals and grains ripped higher earlier this year as economies reopened from lockdown and the Ukraine war disrupted flows of energy and raw materials,” the report added.

Tail Hedge Fund Bets on Commodities

Hedge funds employ some of the most talented human capital and implement some of the most complicated strategies in order to game the capital markets successfully. As such, tailing hedge fund bets can be a viable strategy, and retail investors can do that with a broad-based commodities exchange traded fund (ETF) like the Teucrium Agricultural Fund (TAGS).

Whether it’s for a continued inflation hedge or to simply diversify a portfolio with more alternative assets as commodity prices push higher, a broad-based fund like TAGS is worth considering. When it comes to commodities exposure, most investors may think of oil, but agricultural exposure can also provide more commodities diversification.

For investors looking for agriculture exposure who don’t know where to start, this is where Teucrium can fill a void, offering investors an easy solution. Getting exposure to commodities doesn’t mean investors have to hold various positions.

Investors can have it all in the convenience of 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.

The fund includes the aforementioned Teucrium Wheat Fund (WEAT). To get that broad exposure, TAGS also includes the Teucrium Corn Fund (CORN), the Teucrium Soybean Fund (SOYB)and the Teucrium Sugar Fund (CANE).

For more news, information, and strategy, visit the Commodities Channel.