Teucrium Trading, the Brattleboro, Vt.-based investment firm specializing in futures-based commodities ETFs, filed paperwork with the Securities and Exchange Commission to offer a multicommodity exchange-traded fund that will invest in four of its single-commodity funds.
The Teucrium Agricultural Fund (NYSEArca: TAGS) will be evenly invested in the Teucrium Corn Fund (NYSEArca: CORN), the Teucrium Wheat Fund (NYSEArca: WEAT), the Teucrium Soybean Fund (NYSEArca: SOYB) and the Teucrium Sugar Fund (NYSEArca: CANE). The broad new fund, TAGS, will be rebalanced daily to ensure it always has about 25 percent of its assets invested in each of the four underlying ETFs, according to the filing.
Commodities and agricultural products are in their second decade of a bull market, as growth in emerging market countries such as China, India and Brazil strain available supplies. ETFs such as the PowerShares DB Agriculture Fund (NYSEArca: DBA) have ridden this wave of rising demand, growing rapidly and posting strong returns. DBA, whose price has climbed more than 40 percent in the past two years, had almost $4 billion in assets as of April 21, according to data compiled by IndexUniverse.
Of the four underlying funds, the corn ETF is the only one that has come to market. The company first filed to offer wheat, soybean and sugar ETFs as part of a broad push into commodities last June. That filing also included plans for natural gas and crude oil funds, both of which it brought to market earlier this year.
CORN has gathered more than $91 million since its rollout on June 9, 2010, while the Teucrium Natural Gas Fund (NYSEArca: NAGS) and the Teucrium WTI Crude Oil Fund (NYSEArca: CRUD) have attracted $2.38 million and $5.53 million, respectively.
The sponsor won’t receive a management fee from the new fund, TAGS, but will receive a fee of 1.00 percent a year from each of the underlying funds, the filing said.
Smart beta isn’t smarter than cap weighting, but it is different, and that’s great for investors.
Trial by fire is one way to discover why ETF transparency matters.
Most people now realize leveraged ETFs can hurt you, but how, then, to use them?
What would a shift out of a mutual fund and into an ETF look like up close?