#7 - Invesco DB Agriculture Fund (NYSEARCA:DBA)
When you think about commodities, products like corn, soybeans, and livestock come to mind. However, investing directly in these products through the futures market is unavailable to many retail investors. And if you can, investing in these commodities comes with significant risk.
However, if you have a speculative streak, the Invesco DB Agriculture Fund (NYSEARCA: DBA) may be an option for you to consider. The fund invests in 11 commodity futures including cocoa, coffee, live cattle, soybeans, and corn and rebalances annually. It also invests in U.S. Treasuries that provide a hedge against price declines. The fund is rebalanced annually to reflect market changes.
The DBA fund is up 24% in 2024, but to show the cyclical nature of commodities, the fund is only up about 6% from where it began trading in 2007. However, if you began investing in the fund when it bottomed in 2020, you’re sitting on a gain of over 66%.
About Invesco DB Agriculture Fund
PowerShares DB Agriculture Fund (the Fund) is a separate series of PowerShares DB Multi-Sector Commodity Trust (the Trust). The Fund's subsidiary is DB Agriculture Master Fund (the Master Fund), a separate series of DB Multi-Sector Commodity Master Trust (the Master Trust). The Fund offers common units of beneficial interest (the Shares) only to certain eligible financial institutions (the Authorized Participants) in one or more blocks of 200,000 Shares, called a Basket.
Read More - Current Price
- $25.49
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
Investing in commodity stocks comes with risk. Commodity prices tend to make strong moves in both directions. Some of those moves are cyclical and predictable. However, on many occasions, those strong moves can happen without much notice.
The same is true of stocks tied to the underlying commodities. That may make commodity stocks more suitable for traders, particularly options traders, who embrace the opportunity to profit from short-term price movement.
However, as this presentation shows, there are opportunities to take a long position in commodity stocks. Several of these companies have rock-solid fundamentals and use the cash on their balance sheets to increase shareholder value with buybacks and dividends.
The takeaway is this. Investing in commodities is more volatile than other sectors. But MarketBeat has the research and tracking tools that can help you find stocks that are suitable for your investment style.
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