#7 - Teucrium Wheat Fund (NYSEARCA:WEAT)
Ever since the Russian invasion of Ukraine, investors and consumers have been warned about the coming supply-demand imbalance in wheat. But aside from buying futures contracts, it can be difficult for retail investors to have an easy way to invest in wheat.
The Teucrium Wheat Fund (NYSEARCA:WEAT) is a pure-play ETF that gives investors exposure to wheat futures contracts. The fund uses a laddered strategy that weights its holdings across three futures contracts that are tied to the Chicago Board of Trades (CBOT) Futures Exchange. This spreads the volatility and risk in relatively equally weighted contracts. The fund has over $640 million in assets under management.
The ETF is up 49% in 2022 with most of those gains coming after the Russian invasion of Ukraine. However, investors should be advised that the fund carries a hefty expense ratio of 1.0%.
About Teucrium Wheat Fund
Teucrium Wheat Fund (the Fund) is a commodity pool. The Fund is a series of the Teucrium Commodity Trust (Trust). The Fund provides investors unleveraged direct exposure to wheat without the need for a futures account. The investment objective of the Fund is to have the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for wheat (Wheat Futures Contracts) that are traded on the Chicago Board of Trade (CBOT), which includes the second-to-expire CBOT Wheat Futures Contract, weighted 35%; the third-to-expire CBOT Wheat Futures Contract, weighted 30%, and the CBOT Wheat Futures Contract, weighted 35%.
Read More - Current Price
- $4.70
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
An additional benefit to having commodities in your portfolio is that they help diversify your portfolio. Historically commodities have a negative correlation with stocks and bonds. This means when the value of one asset class goes up the other goes down. And at times when inflation is outpacing the return you get from your other investments, commodities serve as a hedge that can boost your total return.
But investing in commodities is not without risk. Commodity prices are subject to sudden, and strong, price movements. And most commodity trading is done by investors who use futures contracts. However, in 2022, individual investors have the option of investing in exchange-traded funds that help take a little of the risk out of investing in commodities.
The seven ETFs listed in this presentation are just the tip of the iceberg. The reality is if a specific commodity interests you, there is most likely an ETF that tracks its performance. This can be a benefit for investors who have specific knowledge in a particular commodity sector.
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