VanEck has launched an actively managed thematic equity ETF providing exposure to companies driving innovation in the global food industry.
A growing population and the threat of climate change are driving the need for a more sustainable food supply chain.
The VanEck Future of Food ETF (YUMY US) has been listed on NYSE Arca with an expense ratio of 0.69%.
VanEck notes that the global population is expected to increase by 25% to reach 10 billion people by 2050, while a greater proportion of the population will simultaneously enter the middle class, accelerating the consumption of resource-intensive animal-based foods.
These trends, combined with weather-related disruptions caused by climate change, are urgently driving the need for more sustainable agricultural processes and technologies in order to provide a more affordable, nutritious, and robust food future for all.
According to VanEck, by investing in firms that are reducing environmental harm and creating a sustainable food supply chain, the ETF may fit within a socially responsible portfolio.
Commenting on the launch, Shawn Reynolds, Portfolio Manager at VanEck, said: “We are now in the early stages of a multi-decade agri-food system transformation. Growth opportunities in this space currently exist, but the market remains nascent. A number of private firms appear poised to enter the public markets and several established companies are pivoting their business models to embrace the future of food. An active approach to stock selection will position YUMY and its investors to capitalize on these emerging trends.”
According to the ETF’s prospectus document, the fund targets companies within three pillars of the agricultural innovation opportunity set:
‘Food Technology’ companies are defined as firms involved in developing alternative proteins, animal feed and nutrition, and sustainable aquaculture.
‘Precision Agriculture’ companies, meanwhile, refer to firms creating and managing vertical and indoor farms as well as businesses that are integrating robotics & automation and data collection & analysis into traditional agriculture.
Finally, an ‘Agriculture Sustainability’ category captures companies involved with seed genetics, sustainable fertilizer and crop chemicals, and the improvement of food preservation and packaging.