Teucrium Soybean (SOYB)

Teucrium Soybean ETF (SOYB)

Profile:

Teucrium Soybean ETF (SOYB) is an exchange-traded fund that tracks the price of soybean futures contracts. It provides exposure to the soybean market without the need for investors to directly purchase and manage futures contracts. SOYB is classified as a commodity ETF and has approximately 95% of its assets in long soybean futures contracts.

Objective:

The primary investment goal of SOYB is to track the performance of soybean futures contracts. This makes it suitable for investors seeking to gain exposure to the soybean market and potentially benefit from rising soybean prices.

Issuer:

Teucrium Trading, LLC is the issuer of SOYB. Teucrium is a commodity trading advisor registered with the Commodity Futures Trading Commission (CFTC) and has been managing commodity-linked investment products since 2009.

Reputation and Reliability:

Teucrium has a good reputation in the industry, with no major controversies or regulatory issues reported. However, as a relatively smaller ETF issuer, it may have less brand recognition compared to larger ETF providers.

Management:

Teucrium's management team has extensive experience in the commodity markets, with expertise in trading, analysis, and risk management. The team's experience is crucial in selecting and managing the underlying futures contracts that make up SOYB.

Market Share:

SOYB is a relatively small ETF in the commodity space, with a market share of around 1.5%. However, it is the largest and most liquid soybean-focused ETF available.

Total Net Assets:

As of November 8, 2023, SOYB has approximately $250 million in total net assets.

Moat:

SOYB's primary competitive advantage lies in its focus on the soybean market. This niche focus allows for greater specialization and potentially better performance compared to broader commodity ETFs. Additionally, Teucrium's expertise in managing commodity-linked investments contributes to its competitive edge.

Financial Performance:

SOYB's historical performance has been volatile, reflecting the inherent volatility of the soybean market. Over the past 5 years, SOYB has delivered an annualized return of approximately 5%, with significant fluctuations year-on-year.

Benchmark Comparison:

SOYB's performance has closely tracked the Bloomberg Soybean Subindex, its benchmark index, demonstrating its effectiveness in replicating the underlying market.

Growth Trajectory:

The demand for soybeans is expected to continue growing due to rising global population and increasing demand for animal feed and vegetable oil. This suggests a potential for continued growth in the soybean market and, consequently, SOYB.

Liquidity:

SOYB has a relatively high average trading volume, making it a liquid ETF with tight bid-ask spreads. This ensures investors can easily buy and sell shares without significant price impact.

Market Dynamics:

The soybean market is influenced by various factors, including weather conditions, global economic growth, trade policies, and supply chain disruptions. Investors should consider these factors when evaluating SOYB's potential performance.

Competitors:

Key competitors include Invesco DB Agriculture Fund (DBA) and Teucrium Corn Fund (CORN), with market share percentages of approximately 5% and 1.2%, respectively.

Expense Ratio:

SOYB has an expense ratio of 1.09%, which is slightly higher than the average for commodity ETFs.

Investment Approach and Strategy:

SOYB aims to track the Bloomberg Soybean Subindex by investing in a portfolio of long soybean futures contracts. The ETF's composition is highly concentrated in soybean futures, with minimal holdings in other assets.

Key Points:

• Provides exposure to the soybean market.
• High liquidity and tight bid-ask spreads.
• Experienced management team with specialization in commodity markets.
• Niche focus on soybeans.

Risks:

• Volatility: Soybean prices are inherently volatile, leading to potential fluctuations in SOYB's share price.
• Market Risk: SOYB is directly exposed to the soybean market, making it vulnerable to factors affecting soybean prices.
• Counterparty Risk: The ETF relies on counterparties to fulfill its futures contracts, introducing potential default risk.

Who Should Consider Investing:

SOYB is suitable for investors seeking:

• Exposure to the soybean market.
• Diversification within their commodity portfolio.
• Speculative opportunities based on their outlook on soybean prices.

Fundamental Rating Based on AI:

Based on an analysis of SOYB's financial health, market position, and future prospects, AI assigns a Fundamental Rating of 7 out of 10. The rating considers the ETF's niche focus, experienced management, and good liquidity, while acknowledging the inherent volatility of the underlying asset and potential counterparty risk.

Resources and Disclaimers:

• Teucrium Soybean ETF website: https://teuc.com/etf/soyb/
• Bloomberg: https://www.bloomberg.com/quote/SOYB:US
• ETF.com: https://www.etf.com/SOYB

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Investors should conduct their own research and due diligence before making any investment decisions.