Daily Investment Tips

The major reason why you should invest in a Wheat ETF is, wheat is one of the most popular cereal commodity grown into the Global. It is only comparable to rice and maize in its quantity and more than 6000000 tons are harvested every year .

The only wheat only ETF that I know is Teucrium Wheat Fund. This ETF is the only one that tracks the price of wheat. The other option of investing in a Wheat ETF is buying ETFs that have wheat plus other commodities in their basket. These include some of the big names in agricultural commodities etfs:-

• ADZ – PowerShares DB Agriculture Short ETN
• AGA – PowerShares DB Agriculture Double Short ETN
• AGF – PowerShares DB Agriculture Long ETN
• BARN – Global X Farming ETF
• CRBA – Jefferies TR/J CRB Global Agriculture Equity Index ETF
• DAD – PowerShares DB Agirculture Double Short ETF
• DAG – PowerShares DB Agriculture Double Long

written by Constantine Njeru \\ tags: Agricultural Commodities, Commodities ETF, Commodity, Etf, Etfs, Etn, Farming, Farming ETF, Global Agriculture, Investment Opportunity, Jefferies, Powershares, Price Of Wheat

If you are looking into investing in an agricultural commodity ETF  you can select form the following list of agricultural etfs related to agriculture. These agricultural ETFs tend to reflect the performance of the agricultural sector. Some of the ETFs are long while others are short.

ADZ – PowerShares DB Agriculture Short ETN

AGA – PowerShares DB Agriculture Double Short ETN

AGF – PowerShares DB Agriculture Long ETN

BARN – Global X Farming ETF

COWL – Direxion Daily Agribusiness Bull 3x Shares ETF

COWS – Direxion Daily Agribusiness Bear 3x Shares ETF

CRBA – Jefferies TR/J CRB Global Agriculture Equity Index ETF

DAD – PowerShares DB Agirculture Double Short ETF

DAG – PowerShares DB Agriculture Double Long ETN

DBA – PowerShares DB Agriculture ETF

DIRT – iPath Pure Beta Agriculture ETN

MOO – Market Vectors Agribusiness ETF

BAL – iPath Dow Jones AIG Cotton TR Sub-Index ETN

CTNN – iPath Pure Beta Cotton ETN

CAFÉ – iPath Pure Beta Coffee ETN

JO – iPath DJ-UBS Coffee Total Return Sub-Index ETN

NIB – iPath DJ-UBS Cocoa Total Return Sub-Index ETN

CHOC – iPath Pure Beta Cocoa ETN

GRU – ELEMENTS MLCX Grains Index Total Return ETN

JJG – iPath DJ-UBS Grains Total Return Sub-Index ETN

WEET – iPath Pure Beta Grains ETN

WEAT – Teucrium Wheat Fund

The initials on the left are symbols of agricultural ETF / ETN

written by Constantine Njeru \\ tags: Agricultural Commodities, Agricultural Commodity, Agricultural ETF, Agricultural Sector, Commodities ETF, Commodities Future, Commodties Investing, Etf, Etfs, Etn, Global Agriculture, Grains, Jjg, Powershares, Ubs, Vectors

One of the reason why investors have flocked to put their money into ETFs is their low cost and tax efficiency. ETF cost is low compared to mutual funds and hedge funds.

Understanding Cost of ETF

ETFs do not charge redemption fees, and typically have lower expense ratios than mutual funds. However, every time an ETF investor buys or sells an ETF, he or she pays a brokerage commission. For frequent traders, these fees can quickly surpass the lower annual costs that ETFs usually charge.

As you can see, The lower fees advertised on ETFs can be a benefit, but they can also be a trap. Due to your frequent trading you might end up paying more.

written by Constantine Njeru \\ tags: Etf, etf cost, etf fees, Etfs

ETFs are becoming attractive as investments because of their low management fees and tax efficiency.

ETF management fees consist of normal brokerage fees charged by brokers. Because ETFs trade on an exchange, each transaction is generally subject to a brokerage commission. Commissions depend on the brokerage and which plan is chosen by the customer. For example, a typical flat fee schedule from an online brokerage firm in the United States range from $10 to $20, but can be as low as $0 with discount brokers.

ETF Expense Ratio and how they affect ETF management fee

ETFs have a lower expense ratio than comparable mutual funds. Not only does an ETF have lower shareholder-related expenses, but because it does not have to invest cash contributions or fund cash redemptions, an ETF does not have to maintain a cash reserve for redemptions and saves on brokerage expenses. Mutual funds can charge 1% to 3%, or more; index fund expense ratios are generally lower, while ETFs are almost always in the 0.1% to 1% range. Over the long term, these cost differences can compound into a noticeable difference.

Source of Data : Wikipedia ETF Page.

written by Constantine Njeru \\ tags: Brokerage Fees, Etf, etf fees, management fees

I was asking why a broker would offer a no fee ETF and I found the answer from Investopedia,

A no-fee ETF is used as an incentive to get an investor to move his or her account to a particular broker, with the broker forgoing a transaction fee in order to gain access to the investor’s assets. This in turn allows the broker to provide other financial product and services to the investor.

List of No Fee ETFs

No fee ETF or commission-free ETFs are offered by brokers such as

Fidelity – have a selection of 30  Ishares no fee ETFs

Firsttrade – 10 No fees etf

Schwab -13 schwab commission free etf

Scotrade – 15 no fees etf

TD Ameritrade – a selection of over 100 no fee etfs

Vanguard – 64 vanguard no fee etfs

Source of data, No Load Fund

As we wrote above there is nothing like “No Fee” it is all a marketing ploy. In exchange for allowing investors to trade ETF for no fee, the brokers expect you to sign up and purchase additional services.

written by Constantine Njeru \\ tags: etf brokers, Etfs, Fidelity, Firsttrade, Investors, Schwab, Td Ameritrade, Transaction Fee, Vanguard

An ETF is similar to an open-end mutual fund in that they both offer investors a pool of securities that consist of stocks or bonds.

But the difference between ETFs and Mutual funds is like day and night

ETF Vs Mutual Funds – Difference in How they trade

The first difference between ETF and mutual funds is in how they trade. ETFs trade like a normal stock in the stock exchange. Their prices move up and dwon throughout the day, allowing ETF investors to buy and sell anytime the markets are open.

Mutual funds, on the other hand, settle at the close of business, meaning that investors must wait to redeem or buy based on a mutual fund’s net asset value after the close of business.

Tax Efficiency

ETFs also tend to be more tax-efficient because they typically generate relatively low capital gains from fund distributions. ETFs usually have lower turnover of securities because they are not required to sell securities to meet investor redemptions, like mutual funds. When a mutual fund sells securities, it must pass along the capital gains to shareholders, even though the shareholders have not redeemed their shares.

Difference In Fees

ETFs do not charge redemption fees, and typically have lower expense ratios than mutual funds. However, every time an investor buys or sells an ETF, he or she pays a brokerage commission. For aggressive traders, these brokerage fees can quickly exceed the lower annual fees that ETFs usually charge.

Mutual funds on the other hand charge a redemption fees, they also charge annual fees which can be based on your invested amount plus a share of your profits.

written by Constantine Njeru \\ tags: Capital Gains, Etf, Expense Ratios, Mutual Fund, Mutual Funds, Redemption Fees, Tax Efficiency

Australian ETFs and New Zealand Dollar ETFs are a good fit for investors who are interested in commodity-tied currencies of Australia, New Zealand.

There is a direct correlation between commodities and currency, the higher commodity prices rise the higher a currency rises. This ahs been the case with Australian and New Zealand dollar: The currency have been rising on the global rise in commodities.

There are Australian ETFs and New Zealand Dollar ETFs that have been created to take advantage of this currency trends.

FXA – CurrencyShares Australian Dollar Trust

BNZ – WisdomTree Dreyfus New Zealand Dollar ETF

ADE – ELEMENTS Australian Dollar / USD Exchange Rate ETN

Australian and New Zealand Dollar ETFs

written by Constantine Njeru \\ tags: Australia, Australian Currency, Australian Dollar, Commodities, Commodity Prices, Currencies, Currency Trends, Etfs, Exchange Rate, Investors, New Zealand Dollar

One ETF that is designed to take a short position on the US dollar is the PowerShares DB U.S. Dollar Bearish Fund.

PowerShares DB U.S. Dollar Bearish Fund is issued and managed by Deutsche Bank and Amvescap unit PowerShares Capital Management LLC.

PowerShares DB U.S. Dollar Bearish Fund tracks Deutsche Bank U.S. Dollar Index Futures Index — Excess Return, which follows the movement of the U.S. dollar against a basket of six major currencies: the euro, the Japanese yen, the British pound, the Canadian dollar, the Swedish krona and the Swiss franc.

PowerShares DB U.S. Dollar Bearish Fund makes profit when the U.S. dollar falls.

written by Constantine Njeru \\ tags: British Pound, Canadian Dollar, Capital Management Llc, Currencies, Deutsche Bank, Dollar Index, Excess Return, Futures Index, Index Futures, Japanese Yen, Powershares, Short Position, Swedish Krona, Swiss Franc, Us Dollar

These days it is hard to find a currency analyst who is long US dollar, but thanks to Euro Crisis and natural calamities in Asia, the US Dollar is still able to hold its own against major currencies.

US Dollar ETF

For currency investors who still believe in the dollar they can purchase a dollar ETF that is long US Dollar.

PowerShares DB USD Index Bullish Fund

PowerShares DB USD Index Bullish Fund, The fund tracks the Deutsche Bank Long US Dollar Index (USDX) Futures benchmark which is a ruled-based index composed solely of long USDX futures contracts. The USDX futures contract is designed to replicate the performance of being long the US Dollar against the following currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

The PowerShare Bullish ETF makes money when the dollar rises against global currencies.

written by Constantine Njeru \\ tags: Benchmark, British Pound, Calamities In Asia, Canadian Dollar, Currencies, Currency, Deutsche Bank, Dollar Rises Against, Futures Contract, Futures Contracts, Global Currencies, Index Futures, Investors, Japanese Yen, Money, Natural Calamities, Swedish Krona, Swiss Franc, Us Dollar Index, Usd Index, Usdx

One strategy to take advantage of the rolling boom in US farmland prices is buying a US farmland ETF ( exchange traded fund)

Data from US farmland prices & statistics show, since 2000, U.S. farmland prices have risen by 58% after inflation, according to the FDIC. And since 2003, they’ve risen by over 10% annually.

To put it in real numbers, the average price of an acre of U.S. farmland more than doubled from $1030 in 1999 to $2350 in 2008.

Investing In farmland Via ETF

One strategy to take advantage of this boom in US farmland prices is buying a US farmland ETF ( exchange traded fund). ETFs investing in farmland are not plentiful but they are out there.

Market Vectors Agribusiness ETF

One US farmland ETF that we are aware of is the Market Vectors Agribusiness ETF (NYSE:MOO). This farmland ETF is listed in NYSE.

It is cheaper to buy an ETF than to go out and buy a farmland.

written by Constantine Njeru \\ tags: Acre, Amp, Boom, Exchange Traded Fund, Farmland Prices, Fdic, Inflation, Investing, Nyse, Real Numbers, Statistics, Vectors