If you’re like most commodity based investors you’ve either invested in or thought about investing in sugar. Since the best way to do this is deploying capital into ETF’s that have a heavy sugar portfolio or are exclusively focused on sugar. But what are the best ETF’s for sugar that you should be looking at?
Below we explore two sugar ETF’s that we think you may want to consider.
SGG has an asset total of about $31.26 ($MM) with a YTD return of 32.22%.
SSG tracks an index that provides exposure to sugar by rolling into a contract anywhere from two to five months out, on a fixed schedule, and holding until shortly before expiration. This strategy considers the lifecycle of the sugar plant, holding longer contracts during the winter months and shorter contracts during the summer. It also allows the index to hold the most liquid sugar contracts during the year. This newer series B note tracks the same index and avoids path dependency issues that made its predecessor more expensive to hold over time.
CANE has an asset total of about $24.84 ($MM) with a YTD return of 42.81%
This fund tracks an index of sugar futures contracts. It includes the second and third contracts to expire, as well as the contract expiring in the March following the third contract.
It holds three sugar contracts at a time in a laddered fashion to mitigate the futures price being higher than its spot price. This differentiates the fund from its GSCI benchmark, which holds the front-month futures contract. The fund’s commodities pool structure means a K-1 at tax time and a blended tax rate.