Teucrium Trading, the US-based sponsor of the Teucrium family of commodity ETFs, has announced the launch of the Teucrium Agricultural Fund (NYSE: TAGS), an ETF providing exposure to four agricultural commodities in a single fund of ETFs.
The Teucrium Agriculture Fund (TAGS), a fund of ETFs, provides exposure to wheat, corn, sugar (pictured) and soybean.
The new fund, which trades on the NYSE Arca, will invest in corn, soybeans, wheat and sugar by holding an equal weighting of existing Teucrium single commodity funds, namely, the Teucrium Corn Fund (NYSE:CORN), the Teucrium Soybean Fund (NYSE: SOYB), the Teucrium Sugar Fund (NYSE: CANE) and the Teucrium Wheat Fund (NYSE: WEAT).
Commenting on the launch, Sal Gilbertie, President and Chief Investment Officer of Teucrium Trading, said: “TAGS was designed as a fund of ETPs to allow investors to allocate investments in the four core agricultural commodities without having to rebalance their exposure themselves.
“By using the fund of ETPs structure, we are not only providing investors with a greater degree of diversification, we are providing them with the same unique investment methodology used in each of the underlying Teucrium commodity funds.”
Gilbertie said TAGS, which like its underlying funds has been designed to reduce contango or the cost of carrying and rolling futures, will be rebalanced regularly to maintain the 25% weighting in CORN, SOYB, CANE and WEAT.
“With a global population of 7 billion-plus people, it’s clear that the need for commodities, in particular agricultural commodities, has never been more pressing,” Gilbertie said.
“As the global population continues to expand and emerging markets continue to prosper, usage of agricultural commodities such as corn, soybeans, sugar and wheat as food for human consumption, animal feed and for energy is expected to continue to grow. Never has there been a better time to consider investing in agricultural commodities.”
According to Gilbertie, “As a liquid and transparent investment vehicle for commodities, TAGS offers a very viable solution for Registered Investment Advisors, hedge funds, institutional and individual advisers who want to add commodities to their portfolios without investing directly in futures.”
The fund has a headline expense ratio of 0.32%; however, there is a second layer of expenses as each underlying ETF also incurs a fee ranging from 1% to 1.49%. The total expense ratio for the whole fund, therefore, based on an approximate weighted average, is 1.44% pa.