Several weeks back we profiled the largest “Agriculture” based ETP in the U.S. marketplace, as the fund was toiling at 52-week lows before regaining some life throughout late April and the month of May.
When considering DBA (PowerShares DB Agriculture, Expense Ratio 0.85%, $706 million in AUM), as we mentioned in the last piece, it is helpful to examine the underlying futures holdings periodically, since the index is rule based in order to see where momentum may or may not exist in specific agricultural commodities.
Presently, DBA has its highest weighting to Live Cattle (17.21%), followed by a 12.58% allocation to Corn, 12.11% to Soybeans, 11.99% to Wheat, 10.33% to Lean Hogs, 10.23% to Sugar, 8.61% to Cocoa, 8.33% to Coffee, 5.50% to Feeder Cattle, and 3.06% to Cotton.
The entire “Agriculture” based ETP category is simply not large in terms of notional dollars invested, as we see a steep drop-off after DBA throughout the rest of the segment in fund AUM sizes. RJA (ELEMENTS Linked to the Rogers International Commodity Index – Agriculture Total Return ETN, Expense Ratio 0.75%, $107 million in AUM) is the second largest fund in the segment, and is also clearly a diversified agricultural futures based approach like DBA.
After this, there is only one other fund in the space (18 ETPs in the category in total) that has more than $100 million in assets, and that is a “Grains” based product from iPath known as JJG (iPath Bloomberg Grains Subindex Total Return ETN, Expense Ratio 0.75%, $101 million in AUM). Holdings (subject to change) in JJG currently are as follows: Corn (45.88%), Soybeans (33.78%), and Wheat (20.34%).
Corn and Soybeans clearly are well represented presently in both DBA and JJG as we point out above and for those ETF investors whom are not interested or not equipped in investing in individual commodity futures contracts, there are singular ETFs that hone in on all three Grain segments themselves. These funds, in order of AUM size, are WEAT (Teucrium Wheat Fund, Expense Ratio 1.00%, $71 million in AUM), CORN (Teucrium Corn Fund, Expense Ratio 1.00%, $65 million in AUM), and SOYB (Teucrium Soybean Fund, Expense Ratio 1.00%, $11 million in AUM).
We have spoken about all three of these funds in the past, a it is noteworthy that like DBA they are ETFs and not ETNs, which may be useful for those investors or portfolio managers whom are prohibited from investing in ETNs — or simply favor the ETF product structure for various reasons.
The PowerShares DB Agriculture Fund (NYSE:DBA) was trading at $19.81 per share on Friday afternoon, down $0.08 (-0.40%). Year-to-date, DBA has declined -0.80%, versus a 8.17% rise in the benchmark S&P 500 index during the same period.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.