If you’re interested in broad exposure to the Materials – Agribusiness segment of the equity market, look no further than the VanEck Agribusiness ETF (MOO), a passively managed exchange traded fund launched on 08/31/2007.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials – Agribusiness is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 13, placing it in bottom 19%.
The fund is sponsored by Van Eck. It has amassed assets over $1.11 billion, making it one of the larger ETFs attempting to match the performance of the Materials – Agribusiness segment of the equity market. MOO seeks to match the performance of the MVIS Global Agribusiness Index before fees and expenses.
The MVIS Global Agribusiness Index tracks the overall performance of companies involved in agri-chemicals, animal health and fertilizers, seeds and traits; farm/irrigation equipment and farm machinery; agricultural products, aquaculture and fishing, livestock plantations, and trading of agricultural products.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF’s expense ratio.
Annual operating expenses for this ETF are 0.53%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.24%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Deere & Co (DE) accounts for about 8.59% of total assets, followed by Zoetis Inc (ZTS) and Nutrien Ltd (NTR).
The top 10 holdings account for about 57.63% of total assets under management.
Performance and Risk
The ETF has lost about -4% so far this year and is down about -5.98% in the last one year (as of 06/22/2023). In that past 52-week period, it has traded between $77.15 and $95.87.
The ETF has a beta of 0.93 and standard deviation of 18.37% for the trailing three-year period, making it a low risk choice in the space. With about 54 holdings, it effectively diversifies company-specific risk.
VanEck Agribusiness ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MOO is a good option for those seeking exposure to the Materials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
IShares MSCI Agriculture Producers ETF (VEGI) tracks MSCI ACWI Select Agriculture Producers Investable Market Index. The fund has $231.84 million in assets. VEGI has an expense ratio of 0.39%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.