AGF delivers an array of various soft commodities such as corn, sugar, soybean, and wheat all of which have been exhibiting a favorable pricing trend currently. Corn and wheat are gaining on the Ukrainian issue and inclement weather in some major growing regions. Though, short-term in nature, we expect these price drivers to remain in place in the quarter ahead.
With AUM of only $3.5 million, the ETN is unpopular and less liquid in the agricultural commodities space. The product is expensive when compared to other choices in the segment. It charges investors 75 bps in fees per year and an extra cost in the form of wide bid/ask spread thanks to low daily trading.
The fund has a Zacks ETF Rank of 3 (Hold). AGF was up about 45% over the last one month against 3.5% gain in the broader and the largest agro ETF PowerShares DB Agricultural ETF (DBA).
iShares MSCI EAFE Value ETF (NYSEARCA:EFV)
Investors with significant exposure in the U.S. can use EFV for geographic diversification of their portfolio. With an asset base of $2.5 billion, EFV is among the largest ETFs in the foreign large cap equities space. The fund looks to offer exposure to the MSCI EAFE Value Index.
The Index seeks to pick value-oriented securities having higher book value to price ratios, higher forward earnings to price ratios, higher dividend yields and lower long-term growth rate projections than securities that have a growth focus.
More than 65% of the holdings are invested in Europe with UK being the front runner accounting for a quarter of the portfolio. Japan (19%), France (11%) and Germany (10.59%) round out the next three positions (read: Is This a Better Europe ETF?).
The ultra-low interest rates prevailing in these regions with no possibility of a rise in rates down the line, unlike the U.S., might compel some investors to look for dividend yields instead. And for that group of yield-hungry investors, EFV is one of the best suited options. EFV’s 30-day SEC yield stands at 3.99% (as of March 31, 2014).
The fund has low concentration risk from an individual securities perspective, as it puts only 19.45% of share in the top 10 holdings. HSBC Holdings Plc (2.89%), BP Plc (2.28%) and Total SA (2.14%) are the three top elements in the basket. The ETF focuses mostly on the financial sector with two-fifth of assets invested in it. The product charges investors 40 basis points a year in fees, which is lower than most comparable ETFs.
EFV presently carries a Zacks ETF Rank # 2 (Buy). The fund was up about 3% in the last week.
This article is brought to you courtesy of Eric Dutram.