Best Agricultural Commodity ETFs for Q2 2022

Agricultural commodities like corn, soybeans, and wheat are essential to the food supply, thus spawning a giant global commodities market to buy and sell them. However, individual agricultural commodities are subject to dramatic volatility related to factors including weather, season, population, and more.

Investors looking for exposure to agricultural commodities may prefer to instead own an agriculture-focused exchange-traded fund (ETF). These ETFs provide diversification by either investing in futures contracts of a range of different commodities or diversifying the maturity of the futures contracts held for a single commodity.

Six distinct agricultural commodity ETFs trade in the United States, excluding inverse and leveraged funds as well as funds with less than $50 million in assets under management (AUM). These ETFs provide exposure to agricultural commodities, not agricultural companies.

Agricultural commodities, as measured by the S&P GSCI Agriculture Index, have outperformed the broader market over the past 12 months, with a total return of 22.8% compared with the S&P 500’s total return of 17.0%, as of Jan. 27, 2022.

The best-performing agricultural commodity ETF for the second quarter (Q2) of fiscal year (FY) 2022, based on performance over the past year, is the iPath Series B Bloomberg Coffee Subindex Total Return ETN (JO).

We examine the three best agricultural commodity ETFs below. All numbers are as of Jan. 27, 2022.

• Performance Over One-Year: 71.4%
• Expense Ratio: 0.45%
• Annual Dividend Yield: N/A
• Three-Month Average Daily Volume: 61,953
• Assets Under Management: $85.5 million
• Inception Date: Jan. 17, 2018
• Issuer: Barclays Capital

JO tracks the Bloomberg Coffee Subindex Total Return, which reflects the potential returns available through an unleveraged investment in futures contracts on coffee. JO is structured as an exchange-traded note (ETN), a type of unsecured debt security that is similar to a bond but does not make interest payments and trades on an exchange like a stock. The fund is highly targeted because the underlying index consists of just one futures contract. JO’s website alerts potential investors that ownership of the ETNs is not the same as owning interests in the futures contracts that make up the benchmark or a security directly linked to the benchmark’s performance. The sole holding of JO is coffee futures contracts.

• Performance Over One-Year: 35.0%
• Expense Ratio: 2.19%
• Annual Dividend Yield: N/A
• Three-Month Average Daily Volume: 130,634
• Assets Under Management: $121.9 million
• Inception Date: June 9, 2010
• Issuer: Teucrium

CORN is structured as a commodity pool, an investment vehicle that pools investors’ assets to invest in futures contracts. The fund provides exposure to the price of one of the most important agricultural commodities. Corn is used as feed, fuel, starch, sweetener, and even plastic. Investors may find CORN appealing as a hedge against inflation or simply as a tactical tilt toward a specific segment of the agricultural market within a broader portfolio. The fund’s holdings are composed solely of corn futures contracts of multiple maturities.

• Performance Over One-Year: 30.6%
• Expense Ratio: 0.75%
• Annual Dividend Yield: N/A
• Three-Month Average Daily Volume: 172,772
• Assets Under Management: $171.2 million  
• Inception Date: Oct. 17, 2007
• Issuer: Government of Sweden

Like JO above, RJA is structured as an ETN. The fund aims to replicate the performance of the Rogers International Commodity Index — Agriculture Total Return. This index is a well-known commodity benchmark and represents the value of a group of roughly 20 agricultural commodities futures. As an ETN, RJA exposes investors to the credit risk. RJA is used by some investors as a short-term tactical investment tool to gain exposure to agricultural commodities. The top three holdings of RJA are futures contracts of wheat, corn, and cotton.

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