Friday, November 16, 2007

An update on Market Vectors Agribusiness (MOO)

A reader asked about MOO, the Agriculture ETF; I have not looked at the name much since I wrote a very popular entry (usually in the top 5 most read every week) about MOO back in early September [This MOO For You? An ETF to Play the Agriculture Boom]

Upon revisiting this name, nearly a quarter later, I see its a living organism that is changing. It used to have 40 names, now its down to 37, and its chemicals (read: fertilizer) exposure has increased substantially. I actually like this ETF even more now than I did when I first saw it (back then it had a lot more equipment exposure and some other names I did not recognize). It also gives you some extra international exposure with names that do not trade in the USA.

As I told the reader, it's actually quite an easy and painless way to get exposure in the group without buying multiple names - I created my own narrow MOO for the fund, i.e. I don't hold top holding Monsanto (MON) simply because while I think its a great holding and very stable, its very rich - I think there is more upside in other names; same with Agco and CNH Global over Deere, etc.

I will post the top holdings as of 10/31 here so that I can look back it in a quarter and see how its evolving
  1. Mosaic (MOS) 9.6%
  2. Monsanto (MON) 8.6%
  3. Potash (POT) 8.3%
  4. Deere (DE) 7.3%
  5. Komatsu 7.2% (this is a Japanese equipment maker, think Deere/Caterpillar)
  6. Yara Int'l 5.1% (overseas name, not familiar with this one)
  7. IOI 5.1% (overseas name)
  8. Wilmar 4.7% (overseas name)
  9. CNH Global (CNH) 4.5%
  10. Bunge (BG) 4.4%
So that top 10 makes up about 65% of the fund; it also holds Agrium (AGU), Agco (AG), CF Industries (CF). If you go back to my 'Separating Chaffe from Wheat' entry earlier this week (which simply listed the stocks with best relative strength) it is full of agriculture names.

From its peak of $52, the ETF has fallen about 8.5% in the correction which is inline with most of the major indexes, but has been outperforming by a large measure on the way up. Direct link to MOO ETF here.

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