About the Zacks ETF Rank
The Zacks ETF Rank provides a recommendation for the ETF in the context of our outlook for the underlying industry, sector, style box or asset class. Our proprietary methodology also takes into account the risk preferences of investors. ETFs are ranked on a scale of 1 (Strong Buy) to 5 (Strong Sell) while they also receive one of three risk ratings, namely Low, Medium or High.
The aim of our models is to select the best ETFs within each risk category. We assign each ETF one of the five ranks within each risk bucket. Thus, the Zacks ETF Rank reflects the expected return of an ETF relative to other products with a similar level of risk.
For investors seeking to apply this methodology to their portfolio in the agricultural space, we have taken a closer look at the top ranked CORN. This ETF has a Zacks ETF Rank of 1 or ‘Strong Buy’ (see the full list of top ranked ETFs) and is detailed below:
CORN in Focus
The fund provides investors direct exposure to corn futures. The product is expensive as it charges 199 bps in fees per year which is much higher than the average expense ratio prevailing in agricultural commodities ETFs.
It trades in moderate volumes of nearly 120,000 shares on average daily basis that increases the trading cost in the form of a somewhat wide bid/ask spread. The fund has so far attracted $125.9 million in assets this year. The fund is up more than 6% this year.
As such, CORN’s Zacks ETF Rank of 1 or ‘Strong Buy’ also indicates that the fund might witness a significant upturn in the months ahead. Presently, the fund is hovering in the middle of its 52-week range. We believe that there is further room for upside for the product covered, based on the current supply-demand dynamics.
Technical indicators also show signs of hope. The Relative Strength Index for CORN is presently 54.37, indicating that the fund is yet to reach the overbought territory, and could see more gains in the coming weeks.
This article is brought to you courtesy of Eric Dutram.