Commodities Look Set To Outperform, So Keep These 2 ETFs On Your Radar

 | Mar 18, 2021 05:47AM ET

Commodities have been getting significant attention in recent weeks, and possibly for good reason. The Federal Reserve, as well as many other central banks, is likely to keep interest rates at their current low levels for the foreseeable future. Meanwhile, fiscal stimulus measures and the reopening of economies will likely create inflationary pressures.

Higher inflation typically changes the tone of the market, including which asset classes do better than others. Most investors tend to add exposure to commodities for diversification, especially during inflationary times.

We previously discussed several commodity-focused exchange-traded funds (ETFs), including aluminum, base metals, copper, gold and silver. Today, we extend the discussion to two other ETFs that might be appropriate for market participants who believe commodities will show a period of outperformance in the quarters to come.

h2 1. VanEck Vectors Agribusiness ETF/h2

Current Price: $89.10
52-Week Range: $42.52 - $89.19
Dividend Yield: 0.97%
Expense Ratio: 0.56% per year

This fund is an indirect play on agricultural commodities—“staple crops and animals produced or raised on farms or plantations.” Recent metrics highlight :

“26.7% of the world’s population are involved in farming these agricultural commodities. That is over 2 billion people, with nearly 900 million directly employed across the world’s 570 million farms.”

The VanEck Vectors Agribusiness ETF (NYSE:MOO) gives access to businesses involved in agri-chemicals, animal health, fertilizers, seeds, farm equipment, aquaculture, livestock, trading of agricultural products and plantations—such as grains, oil palms, sugar cane, tobacco leaves and grapevines.