ETF Talk: Eat Your VEGI for Portfolio Nutrition

There are very few industries that will always have a place in the market.

Among those few, agriculture is perhaps the most prominent. This is because agriculture is the backbone of modern society. Civilization, as we know it, would not exist without this marvel of human innovation, and our lives would no doubt carry more hardship.

Agriculture is a foundational industry, and, in turbulent markets, it’s beneficial to return to those roots. And there’s no better way to get exposure to such an important market than through the iShares MSCI Agriculture Producers ETF (VEGI).

VEGI tracks a market-cap-weighted index of companies that are sensitive to agricultural commodity prices. The fund targets exposure to the initial phase of commodity production within the global agriculture space. It includes companies involved in the production of fertilizers, agricultural chemicals, farm machinery and packaged food and meats.

VEGI includes equities from both developed and emerging markets, and invests at least 40% in issuers organized, located or doing business outside the United States. The fund is passively managed, and the index is reviewed quarterly in February, May, August and November.

The fund has assets under management of approximately $90.76 million and an expense ratio of 0.39%. It is currently down 1.19% over the last month and down 3.07% over the last three months, but up 12.58% year to date.

Top holdings include Deere & Company (NYSE: DE), 24.45%; Corteva Inc (NYSE: CTVA), 9.12%; Archer-Daniels-Midland Company (NYSE: ADM), 6.24%; Nutrien Ltd. (NYSE: NTR), 6.11%; CF Industries Holdings, Inc. (NYSE: CF), 3.10%; Kubota Corporation (6326.T), 2.68%; Bunge Global SA (NYSE: BG), 2.45%; Mosaic Company (NYSE: PTC), 2.33%; Mowi ASA (MOWI.OL), 2.08% and CNH Industrial NV (NYSE: CNH), 1.99%.

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While investing in agriculture could be a good investment, it might not be right for your portfolio’s diet. Investors should always do their due diligence before adding any stock, fund or ETF to their portfolio.

As I write each week, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.