One of the most lucrative commodities is sugar, and there are some easy ways to add positions to your portfolio that can potentially sweeten your returns, suggests Sean Brodrick, editor of Wealth Wave.
Sugar, like other commodity crops, is a steady riser during inflationary periods. Indeed, commodity crops offer a safe way to diversify investments as the price of goods continues to increase.
One of those investments is the Teucrium Sugar Fund (CANE), an exchange-traded fund (ETF) that provides an easy way to gain direct exposure to the price of sugar.
Volume can be light, averaging just 75,801, and its expense ratio of 2.13% might be off-putting to some. But the ETF is sitting just off its 52-week high of $9.87 and recently tested its 200-day moving average as support.
You can also invest in companies that rely heavily upon sugar for their products — namely, candy makers like The Hershey Company (HSY).
Hershey’s grown from a single factory in 1894 to a snacker’s paradise, ringing up more than $8 billion in sales annually. Notable brands include Hershey's (of course), Reese's, Kit Kat, Jolly Rancher, Twizzlers, Breath Savers and more.
The company also makes meat snacks, snack bites, mixes, popcorn, protein bars, cookies, baking ingredients, toppings, beverages and sundae syrups. And all of that requires sugar … sugar … and more sugar.
The cherry on top? Hershey has increased its dividend every year since the Great Recession, and it currently yields a respectable 1.83% annually to go along with a 90-cent quarterly payout.
And to ice the cake, HSY has outperformed — by a large margin — the SPDR S&P 500 (SPY) and the Consumer Staples Select Sector SPDR Fund (XLP) over the past year.
And unlike many other crops, sugar production and consumption are quite stable (even though we should probably eat a bit less of it).
Always remember to do your own due diligence; but don’t overlook this potentially sweet addition to satisfy your sweet tooth and your portfolio.
