Agriculture Diversified Commodity

Agriculture commodity based diversified ETFs and mutual funds invest the majority of... Agriculture commodity based diversified ETFs and mutual funds invest the majority of their assets in a mix of agricultural commodities. For example, a fund may own both wheat and corn. These funds are passively managed, and tend to own futures contracts. Investors are attracted to these Funds because they offer exposure to multiple agricultural commodities at the same time. Agricultural commodities can outperform in times of economic growth or reduced production, and can help investors maintain their purchasing power in times of inflation. The advantage of owning more than one agricultural commodity at the same time is that an investor doesn’t have all their eggs in one basket. There can be times when corn outperforms soybeans, for example, and vice versa. Having said this, agricultural commodities do tend to move together, in general. A bull market in wheat typically happens alongside a bull market in corn, for instance. As a result, while these funds may be somewhat diversified, they are still a bet on agricultural commodities as a sector. These are typically appropriate for investors willing to take on considerable volatility in search of higher returns. Last Updated: 04/19/2024 View more View less

Agriculture commodity based diversified ETFs and mutual funds invest the majority of their assets in a mix of agricultural commodities. For example, a fund may own both wheat and corn. These funds are... Agriculture commodity based diversified ETFs and mutual funds invest the majority of their assets in a mix of agricultural commodities. For example, a fund may own both wheat and corn. These funds are passively managed, and tend to own futures contracts. Investors are attracted to these Funds because they offer exposure to multiple agricultural commodities at the same time. Agricultural commodities can outperform in times of economic growth or reduced production, and can help investors maintain their purchasing power in times of inflation. The advantage of owning more than one agricultural commodity at the same time is that an investor doesn’t have all their eggs in one basket. There can be times when corn outperforms soybeans, for example, and vice versa. Having said this, agricultural commodities do tend to move together, in general. A bull market in wheat typically happens alongside a bull market in corn, for instance. As a result, while these funds may be somewhat diversified, they are still a bet on agricultural commodities as a sector. These are typically appropriate for investors willing to take on considerable volatility in search of higher returns. Last Updated: 04/19/2024 View more View less