The coffee industry is one of the most popular and profitable industries in the world. According to the National Coffee Association, over half of Americans drink coffee every day. This popularity has created a large and growing market for coffee-related products and services.
One way to invest in this popular industry is through exchange-traded funds (ETFs). ETFs offer investors a way to get exposure to a basket of securities in a single investment. This can be helpful for investors who want to diversify their Coffee investment or those who want to invest in an industry without having to pick individual stocks.
These are the 5 best Coffee ETFs that contain coffee commodity futures contracts and popular coffee companies like Starbucks and Nestle.
1. iPath Series B Bloomberg Coffee Subindex Total Return ETN (JO)
The iPath Series B Bloomberg Coffee ETN gives investors access to an index of coffee futures contracts. The ETF is designed to track the price of the Dow Jones Coffee Index. The ETF has a 0.75% expense ratio and is one of the most popular coffee ETFs. The total assets under management exceeds $100 million, which makes it the most liquid Coffee futures ETF.
2. iPath Pure Beta Coffee ETN (CAFE)
The iPath Pure Beta Coffee ETN is another Coffee ETF designed to track the price of coffee futures contracts. The ETF is linked to the Pure Beta Broad Commodity Index Coffee Excess Return. The ETF has a 0.75% expense ratio and has $5 million in assets under management, which makes it significantly less liquid than the JO ETF.
3. WisdomTree Coffee ETF (COFF)
The WisdomTree Coffee ETF (COFF) is a European product that allows investors to gain exposure to Coffee futures by tracking the Bloomberg Coffee Subindex. The ETF also earns an additional yield by providing the contracts as collateral to boost returns, however this comes with extra risk. The ETF has an expense ratio of 0.54% and currently has $36 million in assets under management.
4. SPDR S&P International Dividend ETF (NYSE: DWX)
The SPDR S&P International Dividend ETF (NYSE: DWX) is another popular option for coffee investors. This ETF tracks an index of 100 high-dividend-yielding stocks from developed and emerging markets outside the U.S. It currently has $1.1 billion in assets under management and holds several coffee companies, including Nestle, Starbucks, and Mondelez International (NASDAQ: MDLZ).
The DWX ETF has a 0.50% expense ratio and is up 11.0% over the last year.
5. VanEck Vectors Agribusiness ETF (NYSE: MOO)
The VanEck Vectors Agribusiness ETF (NYSE: MOO) is an ETF that tracks a broad index of companies involved in the agriculture industry. The fund holds over 80 different stocks, with top holdings including Archer Daniels Midland (NYSE: ADM), Bunge (NYSE: BG), and Monsanto (NYSE: MON).
The MOO ETF has a 0.35% expense ratio and is up 9.5% over the last year.