US Listed ETFs To Hedge Your Portfolio Against The Soaring Food Prices

The war in Ukraine has delivered a shock to global energy markets. Now the planet is facing a deeper crisis: a shortage of food.

A crucial portion of the world’s wheat, corn and barley is trapped in Russia and Ukraine because of the war, while an even larger portion of the world’s fertilizers is stuck in Russia and Belarus. The result is that global food and fertilizer prices are soaring. Since the invasion last month, wheat prices have increased by 21 percent, barley by 33 percent and some fertilizers by 40 percent“,

the New York Times reported on March 20th.

One of the best ways to hedge your portfolio against the soaring food prices is to buy ETFs that offer exposure to:

  1. Agriculture COMMODITIES
  2. Agriculture COMMODITY PRODUCERS
  3. COMPANIES that SELL FOOD

1. AGRICULTURE COMMODITIES

Invesco DB Agriculture (DBA) tracks a basket of futures that includes the below listed agriculture commodities. It is worth noting the top 5 allocations constitute 65 percent of the total portfolio.

Portfolio Composition – Invesco website
DBA past 5 years performance – StockCharts.com
DBA vs SPY ratio past 5 years performance – StockCharts.com

2. AGRICULTURE COMMODITY PRODUCERS

On the other hand the VanEck Vectors Agribusiness (MOO) tracks an index of global agricultural commodity producers. The portfolio is well diversified and the top 10 allocations account for the 57 percent of the total fund.

Portfolio Top 10 Holdings – VanEck website
MOO past 5 years performance – StockCharts.com
MOO vs SPY ratio past 5 years performance – StockCharts.com

3. COMPANIES THAT SELL FOOD

You can also benefit from exposure to food prices by investing into ETFs that hold the companies that sell food:

One thought on “US Listed ETFs To Hedge Your Portfolio Against The Soaring Food Prices

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s