Commodities agricultural ETF

[DRumsfeld2000]

Anyone have any recommendations?

[jiimbergin]

Re: Commodities agricultural ETF

Anyone have any recommendations?

Some of the most common are DBA,MOO which are ETFs and RJA which is a ETN. I have owned all of these and currently own RJA, but you must do your own due dilligence. These have all been discussed in various threads here on itulip.

jim

[Master Shake]

Re: Commodities agricultural ETF

I own MOO and DBA.

[DRumsfeld2000]

Re: Commodities agricultural ETF

Thanks for your help

[jpetr48]

Re: Commodities agricultural ETF

Looking at relative strength charts to GCC and SPY, I would be cautious on new entry. Long term >6 months this looks fine but money might be cycling out of these now

[DRumsfeld2000]

Re: Commodities agricultural ETF

What do you think of RJA? I like the spread of 20 commodities but some people criticise the low liquidity. Does this really matter with an ETN?

I have looked at a number of ETFs and most are heavily into wheat and corn and this makes them a bit top heavy. Wheat is ok but I wonder about corn and bio fuel subsidies. I really want a long term fund to lock away and RJA looks the best.

[charliebrown]

Re: Commodities agricultural ETF

From 10,000 feet I prefer MOO over RJA.

The longest term chart I have of Moo vs RJA is roughly 5 years. Moo slightly out performs, RJA over the period, on a pure price basis. Addtionally MOO pays a dividend. The expense ratio is roughly the same for the two.

I have heard things about ETNs from several sources that says ETNs are actually obligations of the issuing bank, so that if the bank were to get into trouble, the assets backing the ETNs are subject to the action of creditors of the bank.
MOO is a trust and thus is not subect to the bankruptcy of the company sponsoring it.

It seems you have analyzed the components inside RJA and like the way they are tilted. I really have no opinion on that.
Since MOO holds compainies like Deere, it really is not a pure commidity play. Over the long run, your cost basis, and asset allocation will I think make much more difference in your total return, than the tilting of one commodity over another.


I don't think low liquidity is an issue if you do not trade often. If you do, then you will get dinged by the bid-ask spread every time you trade. Additionally if you do decide to get out in a panic because you cannot stand the heat, You may lose some additional money again via the bid-ask spread. I don't know how big your position is but if you want to dump 1000 shares, which is only 11K, you are consuming 1% of the daily volume. That is a little bit un-nerving. During the last commidity run up RJN lost half its value in 5 months.

I sometimes trade GTU. I have seen the spread at times of around .20 on a $50.00 stock. Sometimes this makes me
wonder if I should trade GLD. I trade GTU, because if the trade doesn't work out right, and I'm stuck medium to long term,
I would much rather hold GTU, then GLD.

[DRumsfeld2000]

Re: Commodities agricultural ETF

Thanks for your comments.

My research has shown up that the issuer is Swedish bank SEK. Since Swedish banks are regarded as being more robust than most I am not worried about downgrades etc. I like RJA because of its diversity and the fact that it is based solely on the commodity itself, rather than having companies like Deere etc.

[jk]

Re: Commodities agricultural ETF

Thanks for your comments.

My research has shown up that the issuer is Swedish bank SEK. Since Swedish banks are regarded as being more robust than most I am not worried about downgrades etc. I like RJA because of its diversity and the fact that it is based solely on the commodity itself, rather than having companies like Deere etc.

i believe that a lot of the swedish banks are heavily exposed to the baltic states.