Terry ShaunessyPowerShare DB Agriculture E.T.F.DBADON'T BUYJul 22, 2014
Are futures ETF’s suitable for RRSP holding? This one is not like an agricultural ETF that has a seed companies, etc. but this is straight futures. Anything this speculative doesn’t really belong in an RRSP. You are truly speculating with this one. Because of the resets on these futures based ETF’s, they don’t quite carry out what you think is going to happen. Very expensive from the point of MER, and the tracking error is extremely high. If you want to be in a futures market, do it directly, not through an ETF.
Appropriate to hold in an RRSP? He generally likes agricultural ETF’s, and this would be appropriate for an RRSP with the caveat that it should be in some reasonable portion such as 10% or 15%. (See Top Picks.)
Only trouble with this is that it is a basket of Futures so you have the risk and volatility of futures and all the things that are inherently characteristic of futures. Thinks this would be more for a short-term trading strategy of several weeks to a few months.
Does like this in the agriculture sector. Tracks a basket of different agricultural products but in a 6 to 12 month timeframe this is not going to be an exceptional place to be. There are a lot of pricing related issues that are problematic. Longer term, 3 to 5 years, it is a very good place to be.
Not an endorsement but he does use it in his kid’s trusts. Doesn't pay a yield so he doesn't own it for himself. Feels the next commodity sector to move is agriculture. This one gives him a basket of agricultural commodities without having to deal with futures, etc.
Agricultural ETF. Moderately bullish on agriculture. Only caveat is that some brokerage firms will not allow you to buy, as they perceive it to be a commodity. 2% to 4% weighting in your portfolio would be good.
Still likes agricultural. If you own either PowerShare DB Agriculture E.T.F. (DBA-A) or Market Vectors Agribusinesses E.T.F. (MOO-A), consider averaging down. Not a bad entry level. Long-term investments. Prefers the DBA.
Commodity-based exposure for agricultural soft commodities. Good way to get commodities if you think commodity prices are going to go higher. Structured by Deutsche Bank. Currently flat because of the US$ rally. He is negative on the US$.
Technically momentum is not confirming the decline in the price indicating that the selling pressure is diminishing. Agriculture just like energy is a long term secular investment.
He has taken 15% clients’ portfolios and put it into agriculture. 1/3 to 1/2 is in the iPath DJ-AIG Grains Index (JJG-N), which is wheat, soybeans and corn. Nothing wrong with this one, he just chose to go the JJG route.
To play the agricultural sector, there are 2 ETF's he would highlight. Claymore Global Agriculture (COW-T) and PowerShare DB Agriculture (DBA-A). This one focuses on the commodities themselves and their prices.
Probably one of the better agricultural ones for grains and commodities. Based on a Deutsche Bank commodity index. If you think commodity prices have more room to grow from here, it is a great way to play.
Are futures ETF’s suitable for RRSP holding? This one is not like an agricultural ETF that has a seed companies, etc. but this is straight futures. Anything this speculative doesn’t really belong in an RRSP. You are truly speculating with this one. Because of the resets on these futures based ETF’s, they don’t quite carry out what you think is going to happen. Very expensive from the point of MER, and the tracking error is extremely high. If you want to be in a futures market, do it directly, not through an ETF.