Agriculture Fund Investing– Options Varied as the Crops in the Fields

Tim Gray reported earlier this month at The New York Times Online that, “Two realities undergird the investment case for agriculture: The world’s population keeps swelling and everyone must eat.

“A third reality — climate change — will make satisfying those billions of appetites harder and companies that can help farmers potentially more valuable.

Agriculture isn’t a standard investment sector in the way that, say, financial stocks are, and definitions of it vary, including things ranging from the obvious, like the American equipment-maker Deere & Company, to the offbeat, like Leroy Seafood, the Norwegian fish farmer.”

The article noted that, “‘When we talk about agribusiness, we’re talking about everything from producers of agricultural goods and agrochemicals to fertilizer, animal health, seeds and farm equipment,’ said Brandon Rakszawski, VanEck’s director of product development for exchange-traded funds. The VanEck Vectors AgribusinessExchange-Traded Fund is the largest agricultural index fund, and it returned an annual average of 7.3 percent for the 10 years that ended in September.”

Mr. Gray explained that, “For investors who take a long-term view, options for investing in agriculture are nearly as varied as the crops in the fields.

“They range from actively managed mutual funds that put a portion of their shareholders’ money into agriculture and related sectors — no actively managed fund tracked by Morningstar invests exclusively in agriculture — to E.T.F.s that invest in either agribusiness stocks, commodities futures contracts or real estate investment trusts that buy farmland.”

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