Innovation in Food Tech Paves Way for Growth in This ETF

Russia’s invasion of Ukraine and its occupation of the Black Sea put a spotlight on the global food crisis, which is tangible in emerging economies. As such, food technology innovation is imperative to address this crisis.

“As many as 828 million people go to bed hungry every night, the number of those facing acute food insecurity has soared – from 135 million to 345 million – since 2019. A total of 50 million people in 45 countries are teetering on the edge of famine,” according to the World Food Programme.

The good news is that global innovation can help combat the food crisis. The World Economic Forum is already spearheading innovations, making the food crisis a top priority.

“The World Economic Forum’s Food Innovation Hubs Initiative is garnering multi-stakeholder action for more sustainable food systems, and the Green Tech Festival has brought together change makers for a more sustainable world,” a World Economic Forum blog noted.

“These efforts, combined, are making a real difference when it comes to catalyzing and scaling innovations and ultimately easing the global hunger crisis,” the blog added.

High Growth ETF in Agriculture Tech/Food Innovation

Exchange-traded fund (ETF) investors looking for high growth opportunities in agriculture technology and food innovation can take a look at the Global X AgTech & Food Innovation ETF (KROP). The fund features an expense ratio of 0.50% and a heavy skew (17% of holdings as of October 13) in agri-science company Corteva.

Per its fund description, KROP seeks to invest in companies advancing innovation and the use of technology in the agriculture and food industries. This includes companies involved in the provision of agricultural technologies (“AgTech”) related to precision agriculture, agricultural robots and automation, controlled environment agriculture (e.g., vertical farming, hydroponics), and agricultural biotechnology, as well as those involved in food innovation activities related to protein/dairy alternatives and food waste reduction.

KROP offers investors the following:

  • High Growth Potential: Forecasts suggest the global market for agricultural robots could reach $21bn by 2026, almost triple the market size in 2020.
  • Global Tailwinds: The AgTech and Food Innovation theme could potentially benefit from helping address global food insecurity and minimizing the adverse environmental impacts of large-scale agriculture.
  • Unconstrained Approach: Production and consumption dynamics around food are evolving. KROP seeks to gain exposure to the forefront of these dynamics by investing in AgTech and Food Innovation companies, regardless of sector or geography.

For more news and information, visit the Thematic Investing Channel.