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Teucrium Trading, a US-based issuer of commodity-focused exchange-traded funds (ETFs), recently celebrated the third-year anniversary of its flagship product, the NYSE Arca-listed Teucrium Corn Fund (CORN).
Launched in June 2010, the fund was one of the first exchange-listed vehicles to enable a wide variety of investors to gain liquid and transparent access to corn without the use of a futures account.
Sal Gilbertie, President, Chief Investment Officer and co-founder of Teucrium, said: “We brought CORN and our other funds to the market so that all investors could have access to these core commodities. Corn, soybeans, wheat, sugar, crude oil and natural gas are a part, in some way or another, of nearly everything consumers use.”
He added: “The importance of corn, for instance, in terms of livestock feed, ethanol production, manufacturing and human consumption puts it on par with other widely-held commodities such as gold and energy.”
The fund provides investors unleveraged direct exposure to corn and has been designed to reduce the effects of backwardation and contango. It seeks to replicate the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for corn that are traded on the Chicago Board of Trade (CBOT), specifically the second-to-expire CBOT Corn Futures Contract, weighted 35%, the third-to-expire CBOT Corn Futures Contract, weighted 30%, and the CBOT Corn Futures Contract expiring in the December following the expiration month of the third- to-expire contract, weighted 35%.
Teucrium marked the three-year milestone of this fund with the roll-out of educational tools illustrating the impact of the growing global population on the world’s supply and demand for food and energy.
As an example of this impact, consider that the global population is expected to grow by 75 million people in 2013, or roughly twice the current population of California. Since annual consumption per person is approximately five bushels of corn, three bushels of wheat, and two bushels of soybeans, this translates to an additional 13.5 million acres that need to be cultivated, or an area double the size of Massachusetts, just to meet the associated demand from population growth.
The fund has an expense ratio of 1.99% and has approximately $44 million in assets under management.
UK and European investors looking for exposure to corn could consider either the London Stock Exchange-listed ETFS Corn ETC (CORN), which tracks the DJ-UBS Corn Sub-Index TR and comes with a fee of 0.49%, or the Source Corn T-ETC (SCORN) listed on the Deutsche Börse (Xetra) and the SIX Swiss Exchange, which tracks the S&P GSCI Corn Index TR and charges a fee of 0.94%.