Summary: Investing in commodities is one of the easiest ways to diversify your portfolio and gain exposure to some of the most lucrative sectors. In this guide, you will learn how to invest in wheat ETFs through an online commodity trading platform such as eToro.
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What are wheat ETFs?
Wheat exchange-traded funds (ETFs) are financial instruments that offer investors a chance to gain exposure to the agricultural industry and profit from wheat price movements without actually owning it. That is, wheat ETFs are investment funds traded on stock exchanges, designed to mirror the performance of either wheat itself as a commodity or companies involved in its production and distribution.
Note
Two of the best wheat ETFs to consider checking out in 2024 include:
- Invesco DB Agriculture Fund (NYSE: DBA);
- Teucrium Wheat Fund (NYSE: WEAT).
Note
Best Commodities Broker for Intermediate Traders and Investors
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Invest in 30+ commodities and 3,000+ other assets including stocks and cryptocurrencies.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
1. Invesco DB Agriculture Fund (DBA)
Expense ratio as of December 2023: 0.93%
Asset value as of December 2023: ~$2.16 million
The Invesco DB Agriculture Fund mirrors fluctuations in the DBIQ Diversified Agriculture Index, together with the interest income derived from the US Treasury securities and money market holdings.
The fund is a solid choice for investors seeking an affordable and convenient entry into the market. Note that the fund does not allow direct investment in the underlying index, which comprises futures contracts on highly liquid and widely traded agricultural commodities.
In addition to wheat, the underlying index also comprises corn, sugar, coffee, cotton, cattle, and other commodities. This kind of diversity means fewer issues with short-term price movements.
Invesco DB Agriculture Fund price today
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2. Teucrium Wheat Fund (WEAT)
Expense ratio as of December 2023: 0.28%
Asset value as of December 2023: ~$195 million
The Teucrium Wheat Fund is a commodity pool that tracks the performance of wheat and wheat alone. However, it’s important to note that the fund does not track spot wheat prices — it predominantly holds wheat futures contracts with a number of maturities. Due to its narrow focus, this fund may be more suitable for investors looking for a solid short-term position rather than long-term buy-and-hold investments.
Teucrium Wheat Fund price today
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How to invest in wheat ETFs: Step-by-step
To invest in wheat ETFs, you can take the following steps:
- Step 1: Choose a broker and fund your account;
- Step 2: Research wheat ETFs;
- Step 3: Place your order;
- Step 4: Monitor your investment.
Step 1: Choose a broker and fund your account
First, you will have to find a suitable broker and register an account.
Our go-to platform for wheat ETFs and other commodities is eToro, a major brokerage with millions of daily users and features such as:
- Commission-free stock trading;
- Access to global stock exchanges;
- Charting patterns;
- Fractional shares;
- Copy-trading and Smart Portfolios.
Best Commodities Broker for Intermediate Traders and Investors
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Invest in 30+ commodities and 3,000+ other assets including stocks and cryptocurrencies.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
When you make an account, you can deposit funds you will later use to buy ETFs. Major brokers let users fund their accounts via bank transfers, credit cards, or third-party payment venues, such as PayPal.
Step 2: Research wheat ETFs
With funds in your account, you will have to do a lot of research and figure out what wheat ETFs can help you realize your financial goals. For starters, you should consider your current portfolio status, your risk tolerance, your time horizon, as well as the status of various funds in the sector.
Step 3: Place an order
Finally, you can place an order and add some wheat ETFs to your portfolio. To do that, you can:
- Log into your brokerage account;
- Search for the ETFs you wish to buy;
- Specify the amount you wish to invest;
- Review your order;
- Confirm and execute the order.
Step 4: Monitor your investment
Defining precise investment goals, selecting crucial performance indicators, and adding ETFs to your investment portfolio is only the beginning — you will also have to stay vigilant and monitor the performance of your investments.
To do so, you can make use of the portfolio tracking tools offered by your brokerage to evaluate metrics such as overall portfolio value, return rate, and the performance of individual assets. Furthermore, assess other investments in your portfolio by taking into account elements like earnings reports and market trends and try to diversify your portfolio as much as possible.
For more commodity ETFs, check out our guides on:
- How to Invest in Copper ETFs;
- How to Invest in Silver ETFs;
- How to Invest in Gold ETFs;
- How to Invest in Lithium ETFs;
- How to Invest in Natural Gas ETFs;
- How to Invest in Cobalt ETFs;
- How to Invest in Farmland ETFs.
Pros and cons of investing in wheat ETFs
Pros
- Diversification: Commodities are an easy way to diversify your portfolio and reduce investment risk;
- Liquidity: ETFs can be easily bought and sold;
- Affordable investment: ETFs generally have lower expense ratios.
Cons
- Market volatility: The agricultural industry is sensitive to adverse and unforeseen geopolitical developments as well as poor weather conditions;
- Tracking error: Sometimes, ETFs do not track the performance of the underlying index correctly;
- Limited control: You won’t own wheat yourself.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about wheat ETFs
How do wheat ETFs work?
Wheat ETFs are financial instruments that give investors exposure to the performance of the wheat market without the need to own actual wheat. ETFs are traded on stock exchanges, and they can track the price movements of wheat-related assets, including wheat as a commodity and companies in the agricultural industry involved with the production and distribution of wheat.
What are the best wheat ETFs?
Two of the best wheat ETFs to consider checking out in 2024 include Invesco DB Agriculture Fund (NYSE: DBA) and Teucrium Wheat Fund (NYSE: WEAT).
How to invest in wheat ETFs?
To trade wheat and other agricultural ETFs, you can register an account at a reputable commodity trading platform such as eToro.
Where to trade wheat ETFs?
You can trade wheat ETFs on ETF trading platforms such as eToro.
Why invest in ETFs instead of actual wheat?
Investing in ETFs has a number of advantages. Some of them include liquidity, affordability, and diversification potential. Investing in and managing actual wheat requires large sums of money, as storage facilities, security, and other expenses tend to pile up.
