A Top Agriculture ETF to Buy Now
Buying into agriculture is a sure bet for the long term, and now it has some solid underpinnings in the short term as well, writes Richard Young of Intelligence Report.
Today, there is a terrible drought in the US heartland. Drought can ruin a season for a farmer...and take a toll on an agricultural investor, if his position is not diversified among multiple climate regions.
Your agribusiness investment strategy should be focused on diversifying worldwide to avoid local weather hiccups. That's why I recommend the Market Vector Agribusiness ETF (MOO) to you.
Diversification is one of the pillars of my investing philosophy, and when it comes to investing in companies at the mercy of the weather, diversification is a necessity. Over 60% of the fund's holdings are based outside the United States. Agricultural powerhouse countries like Canada, Brazil, and Australia are well represented.
Fifty percent of the top ten and 70% of the top 20 holdings are based overseas. Some of the more interesting names on the fund's holdings list are Potash Corp. from Canada, Wilmar International from Singapore, and Yara International from Norway.
World Agribusiness Leaders
Potash (POT) is the world's largest fertilizer company. Potash produces potash, phosphate, and nitrogen. The fertilizer company is responsible for 20% of the world's potash production capacity, making it vital to feeding an expanding global population. The use of fertilizers increases the world's crop yield by 40%.
The major growth markets for Potash are countries like India, where crop yields are typically between 20% and 50% of American yields.