Exchange traded funds (ETF) can make your investing life a little easier, and there are quite a few out there to choose from. Many target either the food and beverage industry as whole or specific types of food-related products.
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.
- Investors can trade the food industry through broad ETFs or through ETFs that track specific commodities like coffee, livestock, and corn.
- You can use these products to trade a particular sentiment about where you believe food prices or the food industry is going.
- Food industry ETFs can also help diversify your overall portfolio.
Food Industry ETFs
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 - Invesco Dynamic Food & Beverage ETF
- FXTG - First Trust Nasdaq Food & Beverage ETF
- JO - iPath Series B Bloomberg Coffee Subindex Total Return ETN
- NIB - iPath Series B Bloomberg Coffee Subindex Total Return ETN
- SGG - iPath Series B Bloomberg Sugar Subindex Total Return ETN
- CANE - Teucrium Sugar Fund
Wheat and Grains ETFs
- GRU - ELEMENTS MLCX Grains Index Total Return ETN
- JJG - iPath Series B Bloomberg Grains Subindex Total Return ETN
- WEAT - Teucrium Wheat Fund
- CORN - Teucrium Corn Fund
- SOYB - Teucrium Soybean Fund
Livestock and Cattle ETF
- COW - 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 or 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.
The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.