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Rabobank launches food and agribusiness indices

The Rabo Fastracks Index series is expected to capture the next phase of the agriculture boom for investors looking beyond commodities.
Rabobank International has launched two new food and agribusiness equity-linked indices focused on Asian and global companies.

The Rabo Fastracks Index series is aimed at helping meet the need for food and agribusiness benchmarks for investors who are looking at opportunities in the agriculture sector beyond commodities. Rabobank International is part of the privately owned, Netherlands-based Rabobank Group and is involved in corporate banking, investment banking and international internet and retail banking.

ôAs the bullish run in commodities begins to soften after soft commodity prices have reached all time highs, it is important to identify the agri-opportunities which will be the next big thing after the pure commodity play,ö says Boon Yong Leo, RabobankÆs executive director and part of the indices development team at the bankÆs global financial markets group.

When looking at their theoretical historical performances, the new Rabo Fastracks Asia-Pacific Top 20 (RFA20) and Rabo Fastracks Global ex-Asia Top 20 (RFG20) have both outperformed most food and agribusiness funds globally, as well as other major global stock indices of other asset classes in the past four years.

RabobankÆs food and agribusiness indices will be focused on five sectors that the bank has identified as the next phase in the industry: agri-inputs; agri-machinery and equipment; energy crops and commodities; food processing; and protein.

ôThe global industry is set to undergo significant changes in the coming years. Increased demand for food and animal feed, as well as the growing use of crops for biofuels, require greater deployment of scarce agricultural resources, and have shifted the industryÆs value proposition upstream,ö says Brady Sidwell, assistant director of RabobankÆs food and agribusiness research and advisory department.

These dynamics are creating new opportunities and growth potential which Rabobank believes will extend beyond the boom in the commodities market. Instead of focusing on the commodities themselves, RabobankÆs food and agribusiness indices aim to highlight opportunities emerging for industry players who are best positioned to benefit from changing dynamics in the world market which will change the way agriculture is seen as an investment and value as an asset.

Following the launch of the Rabo Fastracks indices, Rabobank plans to issue index-based, investment products with various risk and return profiles tailored for investors.

Currently, investors have very limited ways to gain exposure from the growth of the food and agribusiness sector. There are only a few funds focused on the market and the traditional commodity indices usually do not invest in companies.

Calculated by Standard & PoorÆs, the indices are supported by RabobankÆs global and highly dedicated food and agribusiness research team that focuses on top-down industry analysis across the food value chain.

Rabobank says it is one of the only banks dedicated to the sector. It has an 85-member food and agribusiness research team, more than 20 of whom are based in Asia.
¬ Haymarket Media Limited. All rights reserved.
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