Given the growing global population, investor interest in the food industry is increasing. Some ETFs have now specifically focused on this.
• Major challenges posed by climatic and demographic changes
• Food of the future offers opportunities for investors
• Various active and passive ETFs to choose from
The food industry is facing upheaval. On the one hand, the demand for food is increasing as a result of the growing world population. On the other hand, people have different requirements for food. The current trend is towards the consumption of plant-based alternatives and sustainable products. Experts therefore attribute great future potential to foods such as algae, legumes, insects, in-vitro meat produced in the laboratory and plant-based meat and milk substitute products.
The importance of Swiss companies
With the Foxberry Tematica Research Sustainable Future of Food NTR Index, the MVIS Global Future of Food ESG Index, the Solactive AgTech and Food Innovation Index and the Solactive Sustainable Food Index, there are various stock indices that focus on innovative companies in the biotechnology and agriculture sectors and Food industry focus.
Although the USA is the country with the largest weighting, companies from Switzerland also play a relatively large role – with the exception of the Solactive AgTech and Food Innovation Index. These include the agricultural machinery manufacturer Bucher Industries, the flavor specialist Givaudan, the packaging manufacturer SIG and Emmi with its milk alternatives.
Variety of ETFs to choose from
Investing in various ETFs is also possible. For example, the Rize Sustainable Future of Food UCITS ETF and the VanEck Sustainable Future of Food UCITS ETF track the Foxberry Tematica Research Sustainable Future of Food Index. According to the fund company VanEck, its VanEck Sustainable Future of Food ETF is designed to be sustainable and invests in companies that use new technologies to feed the world better. The focus is on pure-play companies, i.e. companies that only operate in one field and do not operate different, independent businesses. The Franklin Future Of Food UCITS ETF also tracks the Solactive Sustainable Food Index and, according to its own information, is intended to provide exposure to companies that use sustainable practices in the food industry worldwide.
In addition, investors can also opt for an actively managed ETF, such as the Ossiam Food for Biodiversity UCITS ETF 1A (EUR) or the Ossiam Food for Biodiversity UCITS ETF 1A (USD). However, higher product fees apply here.
If, on the other hand, you would rather invest in established food products, ETFs on the STOXX Europe 600 Food & Beverage are a good option, which contains European companies that produce food and drinks. The iShares STOXX Europe 600 Food & Beverage UCITS ETF (DE), for example, contains shares from Nestlé and Lindt & Spruengli, among others. An alternative to this would be the Lyxor Stoxx Europe 600 Food & Beverage UCITS ETF Acc.
However, potential investors should note that these thematic ETFs only contain relatively few companies and are therefore characterized by little diversification. As a result, their volatility can be higher than other ETFs, especially when companies use comparatively untested technologies.
Editorial team finanzen.net
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