4 Funds And ETFs for Investing in Agriculture

Africa
and
the
Middle
East,
where
food
shortages
and
demographic
pressure
are
most
keenly
felt,
are
the
areas
most
in
need
of
increased
production.
According
to
Diana
Radu,
author
of
Morningstar’s
2023
analysis,
technology
can
help
to
alleviate
some
of
these
concerns,
leading
to
investment
opportunities.
These
are
precision
agriculture,
low-carbon
fertilisers
and
alternatives
to
pesticides.

At
the
same
time,
a
study
produced
in
2019
by
the

European
Investment
Bank
for
the
European
Commission
predicts
that
the
situation
of
arable
land
and
other
available
natural
resources
is
expected
to
remain
unchanged
or
even
worsen,
creating
a
pressing
need
for
innovation
in
the
entire
food
system.

Precision
agriculture,
sustainable
packaging
and
blockchain-based
food
traceability
are
among
the
opportunities
to
produce
more
using
fewer
resources,
sustainably.
As
an
example,
companies
developing
innovative
technologies
such
as
automated
farming
or
drip
irrigation
systems
will
be
able
to
use
the
growing
demand
for
sustainable
crops
to
their
advantage.

Funds
and
ETFs
for
investing
in
agriculture

To
date,
Morningstar
counts
around
fifteen
open-ended
and
exchange-traded
funds
(ETFs)
in
Europe
belonging
to
the
agriculture
sector
equity
category.
These
strategies
invest
in
companies
involved
in
the
production
and/or
sale
of
products
and
services
for
the
agri-food
sector
or
related
sectors.

Pictet
–
Nutrition
P
Morningstar
Star
Rating:
★★★
Morningstar
Medalist
Rating:
Neutral
Q1
Net
Return:
6.1%
Ongoing
Expenses:
2.00%

Launched
back
in
2007,
this
fund
is
by
far
the
largest
in
its
category
in
terms
of
assets
under
management
(almost
€900
million).
Active
throughout
the
food
chain,
it
now
counts
41
names
in
its
portfolio.

iShares
Agribusiness
UCITS
ETF
USD
(Acc)
Morningstar
Star
Rating:
★★★★
Morningstar
Medalist
Rating:
Silver
Q1
Net
Return:
5.2%
Current
Expenses:
0.55%

Launched
in
2011,
this
ETF
aims
to
replicate
the
performance
of
the
S&P
Commodity
Producers
Agribusiness
Index,
which
has
101
holdings
(mostly
US
,
Japanese
and
Canadian
companies).
The
ETF
has
outperformed
its
peers
by
an
average
of
3.7
percentage
points
annualised
over
a
10-year
period.
It
holds
a
Morningstar
Medalist
Rating
of
Silver.

Rize
Sustainable
Future
of
Food
UCITS
ETF
A
USD
Morningstar
Star
Rating:
★
Morningstar
Medalist
Rating:
Gold
Q1
Net
Return:
3.8%
Current
expenses:
0.45%

This
ETF
was
launched
in
September
2020
and
replicates
the
performance
of
the
Foxberry
Thematic
Research
Sustainable
Future
of
Food
Index,
which
consists
of
52
companies
that
aim
to
innovate
across
the
food
value
chain
to
build
a
more
sustainable,
safe
and
fair
food
system
for
our
planet.
Over
the
past
year,
it
beat
the
category
index
by
12.8
percentage
points
year-on-year,
but
underperformed
the
average
of
its
peers
by
5.2%.

VanEck
Sustainable
Future
of
Food
UCITS
ETF
A
USD
Acc
Morningstar
Star
Rating:
n.a.
Morningstar
Medalist
Rating:
Bronze
Q1
Net
Return:
3.5%
Ongoing
expenses:
0.50%

Launched
in
June
2022,
this
strategy
does
not
receive
a
Star
Rating
as
its
track
record
is
shorter
than
three
years.
A
tracker
of
the
MVIS®
Global
Future
of
Food
ESG
index,
it
offers
exposure
to
a
concentrated
portfolio
in
35
names
ranging
from
high-precision
agriculture,
organic
producers
to
meat
substitutes
and
other
alternative
proteins.

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