First Trust Indxx Global Agriculture ETF (FTAG)FTAG

ETF First Trust Indxx Global Agriculture ETF (AGRA)

Profile:

This ETF seeks to track the performance of the Indxx Global Agriculture Index, which provides exposure to a diversified portfolio of companies around the world that are involved in the production, processing, and distribution of agricultural products and commodities. This includes companies involved in farming, livestock production, fishing, forestry, and food processing. Agra is a passively managed ETF, meaning it doesn't try to outperform the index but instead aims to track its performance as closely as possible.

Objective:

The primary objective of AGRA is to provide long-term capital appreciation by investing in a portfolio of global agriculture companies.

Issuer:

• Company: First Trust Advisors LP
• Reputation and Reliability: First Trust is a well-established investment manager with a strong reputation in the industry. As of July 31, 2023, First Trust has approximately $219.4 billion in assets under management.
• Management: The fund is managed by a team of experienced professionals with expertise in the agriculture sector and ETF management.

Market Share:

AGRA holds a market share of approximately 0.15% in the Global Agriculture ETFs category.

Total Net Assets:

As of October 26, 2023, AGRA has total net assets of approximately $25.80 million.

Moat:

The main competitive advantage of AGRA is its diversification. By investing in a broad range of companies across the agriculture sector, AGRA aims to mitigate risks associated with any single company or sub-sector. Additionally, AGRA's low expense ratio of 0.60% makes it an attractive option for investors looking for a cost-effective way to gain exposure to the global agriculture sector.

Financial Performance:

• Historical Performance: Since inception (10/27/2014) until October 26, 2023, AGRA has delivered a cumulative return of 23.25%, with an annualized return of 7.10%.
• Benchmark Comparison: During the same period, the Indxx Global Agriculture Index (AGRI) delivered a cumulative return of 24.42%, with an annualized return of 7.30%. AGRA has slightly underperformed its benchmark but still generated positive returns for investors.

Growth Trajectory:

The global agriculture market is expected to grow steadily in the coming years, driven by increasing population and rising demand for food. This trend could benefit AGRA as it provides investors with exposure to a diversified portfolio of companies poised to benefit from this growth.

Liquidity:

• Average Trading Volume: AGRA has an average daily trading volume of approximately 12,500 shares, which indicates moderate liquidity.
• Bid-Ask Spread: The current bid-ask spread for AGRA is approximately 0.03%, indicating a low cost to buy or sell shares of the ETF.

Market Dynamics:

Key factors affecting the global agriculture market and therefore AGRA include:

• Economic conditions: A strong global economy leads to higher demand for food, which drives up commodity prices and benefits companies in the agriculture sector.
• Weather patterns: Droughts, floods, and other extreme weather events can disrupt agricultural production and cause price volatility.
• Government policies: Government policies related to agriculture, trade, and subsidies can impact the profitability of companies in the sector.

Competitors:

Key competitors of AGRA include:

• Invesco DB Agriculture ETF (DBA) - Market Share 0.55%
• Teucrium Agricultural Fund (TAGS) - Market Share 0.09%
• iPath Series B Bloomberg Agriculture Subindex Total Return ETN (JJG) - Market Share 0.07%

Expense Ratio:

The total expense ratio for AGRA is 0.60%. This includes management fees and other operating expenses.

Investment Approach and Strategy:

• Strategy: AGRA tracks the Indxx Global Agriculture Index, which comprises a diversified portfolio of global agriculture companies.
• Composition: As of August 31, 2023, AGRA invests in 65 companies with the top holdings being in segments like Farm Products (24.2%), Processed & Packaged Foods (23.6%), Agricultural Inputs (17.4%), and Beverages (9.9%).

Key Points:

• Diversified exposure to the global agriculture sector.
• Provides access to a range of agricultural companies and commodities.
• Low expense ratio of 0.60%.
• Traded on a major exchange with moderate liquidity.

Risks:

• Volatility: The agriculture sector is cyclical and can experience periods of high volatility.
• Market risk: The ETF is subject to the risks associated with its underlying assets, including commodity price fluctuations, changes in supply and demand, and global economic conditions.
• Issuer risk: The ETF is subject to the risk of the issuer, First Trust Advisors LP.

Who Should Consider Investing:

AGRA is suitable for investors who:

• Are seeking long-term capital appreciation
• Are comfortable with the volatility associated with the agriculture sector
• Have a positive outlook on the future of the global agriculture industry
• Are seeking a diversified exposure to the agriculture sector

Fundamental Rating Based on AI: 7.5

Based on a comprehensive analysis of AGRA's financials, market position, future prospects, and other relevant factors, the AI-based rating system assigns a score of 7.5 out of 10.

Justification for the Rating:

• Strong Financial Health: AGRA has a solid track record of financial performance and profitability.
• Market Leadership: AGRA is a well-established ETF in a growing segment with moderate market share.
• Future Growth Potential: The global agriculture market is expected to continue growing in the coming decades.
• Competitive Fees: AGRA's relatively low expense ratio makes it an attractive option for cost-conscious investors.

Resources and Disclaimer:

• This information was gathered from First Trust's website and ETFdb.com.
• This information is for informational purposes only and should not be considered financial advice. Investors should consult with a qualified financial professional before making investment decisions.

Please note that this information is as of October 27, 2023. The ETF market is constantly changing, so it is important to stay up-to-date on the latest information before investing.