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Looking for broad exposure to the Materials - Agribusiness segment of the equity market? You should consider the VanEck Agribusiness ETF (MOO), a passively managed exchange traded fund launched on 08/31/2007.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Materials - Agribusiness is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.

Index Details

The fund is sponsored by Van Eck. It has amassed assets over $826.05 million, making it one of the larger ETFs attempting to match the performance of the Materials - Agribusiness segment of the equity market. MOO seeks to match the performance of the MVIS Global Agribusiness Index before fees and expenses.

The MVIS Global Agribusiness Index tracks the overall performance of companies involved in agri-chemicals, animal health and fertilizers, seeds and traits; farm/irrigation equipment and farm machinery; agricultural products, aquaculture and fishing, livestock plantations, and trading of agricultural products.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.53%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 3.07%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Zoetis Inc (ZTS) accounts for about 8.10% of total assets, followed by Deere & Co (DE) and Bayer Ag (BAYN).

The top 10 holdings account for about 54.48% of total assets under management.

Performance and Risk

Year-to-date, the VanEck Agribusiness ETF has lost about -4.46% so far, and is down about -16.61% over the last 12 months (as of 02/26/2024). MOO has traded between $70.31 and $90.66 in this past 52-week period.

The ETF has a beta of 0.94 and standard deviation of 18.11% for the trailing three-year period, making it a low risk choice in the space. With about 60 holdings, it effectively diversifies company-specific risk.

Alternatives

VanEck Agribusiness ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MOO is a sufficient option for those seeking exposure to the Materials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

IShares MSCI Agriculture Producers ETF (VEGI) tracks MSCI ACWI Select Agriculture Producers Investable Market Index. The fund has $130.54 million in assets. VEGI has an expense ratio of 0.39%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.