VanEck Debuts Active Ag ETF

VanEck’s first actively managed equity ETF is aiming to provide exposure to companies trying to solve the challenge of feeding a growing global population while minimizing pollution. The

VanEck Future Of Food ETF (YUMY) launched on the NYSE Arca Thursday, sporting an expense ratio of 0.69%.

The fund takes a broad view of the future of food, combining companies that produce alternative products like plant or insect-based proteins, along with firms that aim to make farms more efficient or emit less pollution.

Deputy portfolio manager Ammar James said the food production industry will have to adapt to a changing planet on multiple fronts, pointing to a 2009 study from the United Nations Food and Agriculture Organization estimating that food production would have to increase 70% from 2009 to levels to feed an estimated population of 9.1 billion people in 2050.

That population is also likely to demand a more varied and health-conscious diet as the middle class expands.

At the same time, agriculture is estimated to generate 14% of global greenhouse gas emissions, and contributes to environmentally damaging processes like deforestation, soil degradation and fertilizer runoff into water sources.

The fund also intends to use ESG considerations in deciding inclusion and weighting of constituents. Each company’s carbon and particulate matter footprint is being analyzed alongside their stated carbon reduction goals, but there is no hard screen that would bar a company’s inclusion.

James said that choice will allow the fund to include companies that are making efforts to reduce emissions on their ends and in the fields of their customers.

“What's John Deere’s Sustainalytics score today? It might not be so good, but if we can see the transition and capture that before it happens, we want to do it that way,” he said.

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