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ETFs in Focus Post Deere's Mixed Q1 Results

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Deere & Co (DE - Free Report) reported mixed first-quarter fiscal 2025 results, beating earnings estimates but lagging revenue estimates. Shares of Deere dropped 2% at the close following the results. 

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This has put ETFs with the largest allocation to this farm equipment giant in focus. These funds include iShares MSCI Agriculture Producers ETF (VEGI - Free Report) , Global X AgTech & Food Innovation ETF (KROP - Free Report) , First Trust Indxx Global Agriculture ETF (FTAG - Free Report) , Strive Natural Resources and Security ETF (FTWO - Free Report) and VanEck Agribusiness ETF (MOO - Free Report) .

Deere’s earnings per share were $3.19, which beat the Zacks Consensus Estimate of $3.13. However, earnings fell 49% from the year-ago quarter. Net sales of equipment operations (comprising Agriculture & Turf, and Construction & Forestry) declined 35.1% to $6.81 billion and missed the Zacks Consensus Estimate of $7.70 billion. Total net sales (including financial services and others) were $8.51 billion, down 30% year over year.

For fiscal 2025, the farm equipment giant reaffirmed its net income guidance of $5-5.5 billion. The company expects Production & Precision Agriculture revenues to fall 10-20%, with declines of 10% in Small Agriculture & Turf and 10-15% in Construction & Forestry.

ETFs in Focus

iShares MSCI Global Agriculture Producers ETF (VEGI - Free Report)

iShares MSCI Agriculture Producers ETF provides global exposure to the companies that produce fertilizers and agricultural chemicals, farm machinery, packaged foods, and meats by tracking the MSCI ACWI Select Agriculture Producers Investable Market Index. Holding 135 stocks in its basket, Deere takes the top spot at a 26.9% share. American firms account for 63% of the assets, whereas Canada, India and Norway round off the next three spots.

iShares MSCI Agriculture Producers ETF is less popular and illiquid, with $93.4 million in AUM and around 16,000 shares in an average daily volume. It charges 39 bps in fees per year from investors (see: all Materials ETFs here).

Global X AgTech & Food Innovation ETF (KROP - Free Report)

Global X AgTech & Food Innovation ETF seeks to invest in companies advancing innovation and the use of technology in the agriculture and food industries. It tracks the Solactive AgTech & Food Innovation Index and holds 29 stocks in its basket. Deere occupies the top position with a 14% share. American firms account for 49% of the assets, whereas Canada, Japan and Britain round off the next three spots.

Global X AgTech & Food Innovation ETF has amassed $8.9 million in its asset base and charges 51 bps in fees per year from investors. It trades in an average daily volume of 13,000 shares.

First Trust Indxx Global Agriculture ETF (FTAG - Free Report)

First Trust Indxx Global Agriculture ETF follows the Indxx Global Agriculture Index, which is a market-capitalization weighted index designed to measure the performance of companies directly or indirectly engaged in improving agricultural yields. It holds 50 stocks in its basket, with Deere occupying the top position at 10.6%. The United States is the top country with a 32.3% share, whereas Germany and India hold 17.1% and 16.5% share, respectively. 

First Trust Indxx Global Agriculture ETF has accumulated $5.9 million in its asset base and is trading in an average daily volume of 1,000 shares. It charges 70 bps in annual fees.

Strive Natural Resources and Security ETF (FTWO - Free Report)

Strive Natural Resources and Security ETF follows the Bloomberg FAANG 2.0 Select Index and offers exposure to companies engaged in national security and natural resource security. It holds 51 stocks in its basket, with Deere occupying the second position at 9.8%.

Strive Natural Resources and Security ETF has accumulated $27.8 million in its asset base and trades in an average daily volume of 22,000 shares. It charges 49 bps in fees per year from investors.

VanEck Vectors Agribusiness ETF (MOO - Free Report)  

VanEck Agribusiness ETF is by far the most popular choice in the space, with an AUM of $569 million and an average daily volume of 67,000 shares. It tracks the MVIS Global Agribusiness Index, which offers exposure to companies involved in agri-chemicals, animal health and fertilizers, seeds and traits, farm/irrigation equipment and farm machinery, aquaculture and fishing, livestock, cultivation and plantations and trading of agricultural products.

VanEck Agribusiness ETF holds 58 securities in its basket, with Deere occupying the top position with an 8.7% share. It charges 53 bps in annual fees.
 

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