is the name of one of the newest exchange traded fund (
) providers. While it might not be well-known just yet, they've
already made a splash with a first-of-its-kind commodity ETF.
Teucrium Corn Fund (NYSEArca: CORN)
, the industry's first
single agriculture commodity
ETF, began trading in July.
Teucrium President Sal Gilbertie is no commodities newbie. He
spent almost 30 years trading commodities and derivatives and
started what's now known on the Chicago Board of Trade as the
ethanol swap. In fact, Gilbertie is such an expert on energy that
"people call me petro-centric."
Gilbertie takes pride in the fact that everyone at Teucrium has
deep knowledge in the commodities space - they have all traded them
at one point or another.
Although he officially made his move to enter the ETF world at
the end of 2009, he and a team of people worked on getting Teucrium
off the ground for a full year.
Gilbertie's move into commodities isn't because commodities are
trendy, either. He believes in them.
"With the new world order of expanding commodities, world
populations expanding, growing prosperity, demand for world
resources is increasing, and that's not going to go away," he says,
stressing that food and energy account for most of this demand.
He took on corn first because of its enormous size. "It's in
everything - in 25% of the items at the grocery store."
The primary use is as feed for animals, which ties in once again
to population growth and the
whole demand picture
: as more people become prosperous, they'll eat a protein diet. [
Why Investors Like Agriculture ETFs.
Before bringing CORN to market, Gilbertie looked at all the
debates about contango
and designed the ETF to address those concerns. CORN never holds
spot. "We intentionally designed the benchmark to be multiple
futures contracts, not just concentrated in one."
In order to further mitigate the effects of contango, the
contracts are spread throughout the crop year by holding the second
and the third month, then the December after the third month.
Teucrium has five more ETFs waiting in the wings for regulatory
approval: oil, natural gas, sugar, soybeans and wheat. [
Agriculture ETFs: Withering Crops, Growing
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