I found this little item at FT Alphaville yesterday about what could simply be described as an Australian meat fund.
Its kind of a quirky idea and not surprisingly Macquarie Bank is involved.
I have no opinion for now on investing in cattle in Australia in this or any other manner but it opens a door to a different way to invest. According to the FT piece the market in Australia for beef has been healthy for quite a while. This fund would be a way to invest in the real economy, presumably (I just read about this so bear with me if I don't have every aspect of this dissected).
This is intriguing to me. It might pave the way to palm oil in Malaysia, timber in New Zealand or fish in Iceland, as three examples.
A reasonable first reaction might be to laugh at these but capturing the economic goings on in a country without direct stock market exposure is probably a good way to reduce volatility and dip a toe into some countries that you might not want exposure to because of volatility tolerance.
If this concept goes anywhere I am sure Macquarie will be in there somewhere. I would further add that this idea strikes me as having more merit that several of the equity ETFs that have come out or are in the pipeline.
12 comments:
Roger - do you know what the breakeven is for an ETF run by a large well known bank, such as Macquarie Bank would be either in assets under mangement or in yearly expenses? Perhaps you mentioned it before and i missed it. Love the posts!
$100 million seems to be a common goal for assets in a fund but I am not sure that they need that much to be profitable. I am quite certain that $20-$30 million though is a money loser.
When a fund company has a could of funds above the $ billion mark they can afford to take a little more risk in the product line.
Why not just buy cattle futures?
two things; one is that the fund in question is geographic to Australia, futures traded in the US are not unless you mean to access an Aussie futures market it one exists.
The other reason is that managing expirations and such is not easy. It may not be the most difficult thing out there but there is a complexity to it.
Still waiting for the Milk ETF.
if no milk etf maybe we should buy Vina Milk (i think that is the name) in Vietnam.
Interesting stuff. When is the hay ETF going to be available?
Mr. Burns stock picks are looking pretty prescient.
Not a bad idea. But I would also need to see a vegetable ETF for hedging purposes.
Roger,
What about currency risk? I'm assuming the cattle would be purchased with Aussie dollars?
there would be currency risk but it would be no different that the currency risk of buying a stock from OZ.
I sheepishly would not steak much on this concept.
Good JOb! :)
Post a Comment