Investors looking to take a bite out of innovation in the food industry have a new item on the menu: an ETF.
The VanEck Future of Food ETF will be the firm’s first to employ bottom-up, fundamental research and will focus on companies engaged in agricultural and food technology and innovation. VanEck is launching the actively-managed exchange-traded fund under the ticker “YUMY” on Thursday.
“The growing global population and the concurrent threats from climate change are driving the need for more sustainable agri-food processes and technologies in order to provide for a future with more affordable, nutritious and safe food for all,” said VanEck’s Shawn Reynolds, who will co-manage the portfolio with Ammar James.
The firm sees opportunities in themes including precision agriculture, alternative proteins and sustainable packaging. One area of the industry — plant-based products — has attracted an abundance of capital in recent years, with firms like Beyond Meat Inc. and Oatly Group AB going public. Those stocks have struggled to keep pace with the market’s rally this year, with Beyond Meat down 47% in 2021 and U.S. shares of Oatly trading 51% below the price of their initial public offering in May. Meanwhile, the MVIS Global Future of Food Index has fallen 15% year-to-date.
Still, Bloomberg Intelligence anticipates sales of plant-based foods and dairy will quickly accelerate in 2022, and estimates that the global market could grow to $162 billion in the next decade from $29.4 billion in 2020.
Active ETFs have launched at twice the pace of passive funds in 2021 as demand surges for more specialized products, including thematic offerings.
YUMY is listed on NYSE Arca and charges a management fee of 0.69%. (Adds context on active launches.)
© 2021 Bloomberg L.P.