The Best Agriculture ETFs of 2012

Teucrium Soybean Fund (NYSEARCA:SOYB)’s Strategy Wins

It would appear that 2012 is the year of unique strategies, as these three funds have been able to outperform some of the more basic, first generation products. The Teucrium Soybean Fund (NYSEARCA:SOYB) holds multiple futures contracts on soybeans to alleviate contango . The fund has been criticized for its expense ratio of 100 basis points, but its methodology has clearly been a winner this year, as the fund has jumped more than 13.3%.

What About The Big Guys?

PowerShares DB Agriculture Fund (NYSEARCA:DBA) and RJA are without a doubt two of the most popular ag ETFs and even among the most known commodity products. Both of those funds dragged way behind on the year, as DBA (the largest ag product by far) actually lost 1.8%, while RJA gained a respectable 3.4%. Of course, it is worth noting that all of the above ETFs were greatly favored in this year’s drought, so had 2012 weather patterns been normal, this list could look significantly different. Don’t count out PowerShares DB Agriculture Fund (NYSEARCA:DBA) and RJA based on this year’s performance; it just means that their diversity was not as able to capture the grains rally. It also means that they will not be as susceptible to a drop that may occur if crop outputs return to normal in 2013.

The sector as a whole will certainly be a good one to watch over the next year, as it has plenty of room to move in either direction.

This article was originally written by Jared Cummans, and posted on CommodityHQ.