Teucrium Trading, a US-based issuer of commodity-focused ETFs, has launched a new fund that seeks to deliver positive returns regardless of market direction through a systematic long/short strategy across agricultural futures.
The ETF utilizes artificial intelligence to enact long and short positions across a broad range of agricultural commodities.
The Teucrium AiLA Long-Short Agriculture Strategy ETF (OAIA US) has been listed on NYSE Arca with an expense ratio of 1.49%.
The fund is linked to the AiLA-S033 Index which consists of between one and nine standardized agricultural commodities futures contracts traded on either the Chicago Board of Trade or the Intercontinental Exchange. Eligible commodities include corn, soybeans, soybean meal, soybean Oil, wheat, Arabica coffee, cotton, NY cocoa, and sugar.
The ETF’s asset allocation is powered by proprietary artificial intelligence developed by technology and data analytics firm OPALai. The firm harnesses machine learning to analyze the micro features of each commodity (futures curve structure, prior day closing price, and recent trading range) as well as macroeconomic indicators such as foreign exchange rates, gross domestic product, consumer price index, and unemployment rates.
The index has a strong track record dating back to 2017 with an annualized return of 18.77% through 2021, and 20.43% in 2022 (as of 19 December), highlighting how long/short strategies can post positive returns through commodity, stock, and bond market downturns.
Teucrium has more than a decade of experience sponsoring agricultural commodity ETFs. The firm’s line-up includes long products on corn, wheat, soybeans, and sugar, as well as two long-only diversified agricultural commodity ETFs.
Commenting on the new listing, Sal Gilbertie, CEO of Teucrium Trading, said: “Given recent volatility in financial markets, we believe that now is an opportune time for investors to consider diversifying their portfolios with market-neutral, long-short strategies. OAIA is a unique opportunity for investors to access an agricultural hedge fund-like strategy through an exchange-traded and relatively low-cost offering.”