Ron Rowland: Global X Farming ETF (NYSE:BARN), launched on 6/2/11, becomes the fourth food supply chain ETF introduced by Global X over a span of five weeks. The new ETF attempts to comprehensively cover the farming sector by focusing on companies involved in agricultural products, livestock operations, and the manufacturing of farming equipment.
The underlying Solactive Global Farming Index is designed to measure broad based equity market performance of global companies involved in the farming industry. Its constituents have significant revenues from producing, marketing, and/or distributing agricultural products, livestock, farming equipment, or other related products and activities.
The 50-stock index uses a free float market capitalization weighting approach with constituents capped at 4.75% at the twice per year rebalancing. Country representation is U.S. 31.7%, Singapore 15.1%, Malaysia 12.0%, China 7.0%, U.K. 5.9%, Japan 5.4%, Canada 4.8%, Netherlands 3.4%, Brazil 3.4%, and others 10.6%.
Global X does not provide the subindustry breakdown fro BARN, but the current list of holdings is here. A quick glance may lead you to believe the fund has 20% in cash. However, upon a full review you will see that the cash is merely offsetting the fund’s short positions in various currencies in order to maintain the desired currency profile.
BARN rounds out Global X’s suite of 4 “F’s” of the food supply chain: from resources to consumer staples (see included chart prepared by Global X). The other three members of the suite are:
- Global X Fertilizers/Potash ETF (NYSE:SOIL)
- Global X Fishing Industry ETF (NYSE:FISN)
- Global X Food ETF (NYSE:EATX)
Written By Ron Rowland From Invest With An Edge No positions in any of the securities mentioned.
Ron Rowland is the founder of Invest With An Edge and serves as the Executive Editor. He is also editor of AllStarInvestor.com and Chief Investment Officer of Capital Cities Asset Management (www.ccam.com). Quoted widely in the financial media, Ron is the industry go-to guy for sector rotation insight and investment strategies using ETFs and mutual funds.