How to invest in agriculture: the best mutual funds

Investing in agriculture through specialized investment fund is a practical decision and safer than devote himself to this primary activity.

Investing in agriculture does not necessarily mean acquiring a farm and devoted to plant or raise animals. There are mechanisms that can be even more beneficial to work in farming or livestock, such as agricultural investment funds increasingly popular for their competitive rate of return.

What are mutual funds?

may be the case that an individual or company wants to invest in agriculture, through the acquisition of shares of companies in this industry, but has neither the time nor the skills to spend all day negotiating with such securities to maximize profitability.

In this case the best thing to do is to give that money to an investment fund manager that groups with other investors and with that "package" of resources dedicated to buying and selling shares of several companies dedicated to that sector economic, using their knowledge in the field and spreading the risk.

If a fund has a capital of 1,000,000 euros, to cite one example, and the investor buys a share for 10,000 euros, means that acquires 1% of it and you will be entitled to the profits (or losses) in the proportion. Usually, such participation can be sold quickly and easily, after an initial period minimum stay. In turn, it is important that the fund manager charges a fee for their work, which is deducted from the profits of that.

Funds dedicated to investing in agriculture

Although not as common as those associated with commercial or industrial activities (which also have a longer tradition securities), investing in agriculture through a mutual fund is fashionable among savers sophisticated for its high profitability.

Several reasons point to the growth of farming activity and raising animals for consumption. One is the steady increase in the global population (60 million annually). Another is the rapid development of emerging economies like China and India, which will require more food. Finally, it also highlights the rising production of biodiesel, fuel made from corn, sugar cane and other similar crops.

One of the funds to invest in agriculture is the Baring Global Agriculture Fund, administered by the Management Baring, who had a return of 17.9% in 2010, and the World Agriculture Fund, administered by the British firm BlackRock, with an annualized return of 16 , 4% in 2010, among others.