Email of the day (2)
Comment of the Day

February 28 2011

Commentary by Eoin Treacy

Email of the day (2)

on a grain price tracking fund:
"Does anyone in the collective know of an ETF that tracks the grains? - Thanks"

Eoin Treacy's view Thank you for this question which others may also be interested in. Subscribers will be aware of our reservations about funds that hold passive positions in futures for investors. Such instruments have management, contango and interest rate fees which make them more appropriate for trading than investing, particularly during corrective phases.

The ETFS Grains Fund is listed in the UK and has both US Dollar and British Pound versions. It tracks the Dow Jones UBS Total Return Grains Index which comprises futures contracts of corn, soybeans and wheat. The fund has performed in line with recent aggregate performance of these grains. There is also a leveraged version of this fund. The iPath Dow Jones UBS Grains ETN is a US listed fund tracking the same index. If subscribers have additional suggestions, I would be happy to add them.

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