Whether you have a sub-sector of the food industry in mind such as sugar or livestock, or if you want to give your portfolio general exposure to the food market, you have several options. You can target food-related commodity futures or a food industry index, or even companies involved with specific foods or beverages. With livestock ETFs, you’re not only targeting meat products but non-food products like leather gloves. But commodities can be a bit difficult to trade for beginning investors. Index baskets are not the easiest trades to fill, and targeting equities to gain the right exposure can be taxing. Enter food ETFs—instant exposure to the food sector with one trade. Each fund is a mini-portfolio aimed at your food-investing goal, whether it’s the entire industry or one certain type of food like corn.
Food Industry ETFs
Not only are ETFs simple transactions, but they come with many other advantages as well, particularly tax benefits. ETFs can even save you some money on commissions and fees in some cases. If all this sounds like a good plan to you, here are some exchange traded funds and notes that target the food industry and some sub-sectors as well.
Broad Food Industry ETFs
PBJ: The Invesco Dynamic Food & Beverage ETFFXTG: The First Trust Nasdaq Food & Beverage ETF
Coffee ETF
JO: The iPath Series B Bloomberg Coffee Subindex Total Return ETN
Cocoa ETF
NIB: The iPath Series B Bloomberg Coffee Subindex Total Return ETN
Sugar ETFs
SGG: The iPath Series B Bloomberg Sugar Subindex Total Return ETNCANE: The Teucrium Sugar Fund
Wheat and Grains ETFs
GRU: The ELEMENTS MLCX Grains Index Total Return ETNJJG: The iPath Series B Bloomberg Grains Subindex Total Return ETN WEAT: The Teucrium Wheat Fund
Corn ETF
CORN: The Teucrium Corn Fund
Soybean ETF
SOYB: The Teucrium Soybean Fund
Livestock and Cattle ETF
COW: The iPath Series B Bloomberg Livestock Subindex Total Return ETN
Consult Your Broker
New funds are created all the time and others are taken off the market, so contact your broker or consult a financial professional if you have any questions about ETFs. Each fund should be diligently researched before you make any trade. Know what it is in each ETF and the risks associated with it. You might also want to watch the fund for a while before you invest. See how it reacts to different market conditions and follow any news about the ETF, its holdings, and the sector it represents. Food ETFs are a great way to diversify a portfolio with a defensive sector that can remain resilient even in economic cycles characterized by recession or extraordinary events. Food ETFs are also a great way to implement a strategy based on research or opinions you have about the industry. You can even use these ETFs to hedge any risk you might have in your portfolio from food-related assets or countries where these foods are the main exports. Whatever your investing goals, ETFs will hopefully bear the “fruit” you expect.
