“A farmer gathers arid corn crops on his farm in Kenya’s coastal town of Kwale.
Accorting to ETF investor, Tom Lyndon said of the commodity boom on CNBC, ““as a trend that’s not stopping any time soon.” Adam Patti, Indexiq CEO considers CROP a Hot Commodity. IndexIq likes the IQ Global Agribusiness Small Cap ETFs.
This CROP EFT has taken off like a rocket since inception two months ago.
In the interview Adam Patti said, “Look at food inflation for instance, there’s 6.9 billion people on the earth today, in 2050 its forcast to be 9 billion. The prices of food, corn in particular today, wheat, are being driven both on the demand side, and the supply side. On the demand side you have a wealthier more advanced consumer, increased bio fuel use. On the supply side, there is only so much farmland…”
About this CROP ETF
The IQ Global Agribusiness Small Cap ETF (CROP) was launched on March 22, 2011. This investment seeks results that correspond generally to the price and yield performance of its underlying index, IQ Global Agribusiness Small Cap index. The fund employs a “passive management” – or indexing – investment approach designed to track the underlying index.
Many of the companies included in this index either do not trade in the U.S. or are thinly traded in the Pink Sheets. Therefore, the ETF could provide an opportunity for an investor looking for international exposure in the small cap agricultural space.
The underlying index is a rules based, modified capitalization weighted, float adjusted index intended to give the overall performance of the global, small-cap sector of publicly traded companies engaged in agriculture business, including crop production and farming, livestock operations, and food products machinery,etc. It is non-diversified.
Fees & Management
IndexIQ Chief Executive Adam Patti (left) said CROP will provide exposure to global small-capitalization companies engaged in the growing agribusiness sector. Because it is an ETF, Patti said, CROP will give investors “a highly liquid, highly transparent, low cost, tax efficient” way to gain exposure to agribusiness’ growing demand for food crops and shrinking supply of them.
The CROP ETF arrives at an unprecedented time in food history: prices recently soared 3.9% in February, the biggest monthly gain since November 1974, marking the continuation of a trend that many economists expect to hold true for at least the remainder of the year.
“In our view, small capitalization companies are best positioned to translate this demand into significant growth,” Patti said. “They are under-represented in other investment options, are typically faster growing and, in many cases, are undervalued relative to mega-cap multi-national companies, making them attractively positioned for growth and for acquisitions by the larger global players. We believe CROP is an efficient vehicle for gaining exposure to this dynamic sector and to these companies worldwide.”
From a recent post on iStockAnalyst.com, who called CROP one of Nine New Etfs Rising Above The Noise
IQ Global Agribusiness Small Cap (CROP) is another new niche. Several ETFs already cover the food production sector, but CROP zeroes in on the smallest 10 percent of such stocks. This is potentially a new way to profit from rising food prices.
Recent new stories supporting the global crop shortage.
BBC News – Pakistan ‘crop shortage‘ warningMar 24, 2011 … Lowering wheat prices would create food shortages and encourage smuggling in Pakistan, officials say, after a WFP warning.
Much of southern Africa continues to face severe food shortages, largely the result of one of the worst droughts in a decade. Recent rainfall has been …
Sep 28, 2010 Bees and other pollinators in India are dwindling, raising concern that some food crops could become scarce…
Jan 13, 2011 … From Australia’s disaster: Fears of a Global wheat shortage have risen … be able to do their jobs leading to crop losses this report warns…
Farmers in South Asia and southern Africa are at particular risk of growing food shortages due to climate change in just 20 years, …