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The credit crunch and fears of an economic slowdown have wreaked havoc and infected various corners of the global market.
But one area of the market has blossomed despite harsh conditions: agriculture.
Surging oil prices that have increased investment in biofuels, rising demand from developing markets and performance-chasing commodities speculators have combined to push crop prices near record highs and helped agriculture industry stocks plow ahead.
Companies ranging from fertilizer producers to farm equipment manufacturers have been reaping the rewards of today's boom.
For example, the world's largest potash exporter, Canpotex, which is made up of fertilizer producers Potash of Saskatchewan (POT, news, msgs), Mosaic (MOS, news, msgs) and Agrium (AGU, news, msgs), announced in mid-April that it will ship one million metric tons of the substance at $576 per metric ton -- a $400 per metric ton increase from the 2007 contract price -- to Chinese fertilizer importer Sinofert Holdings.
With the supply-and-demand balance strongly tilting in their favor, share prices of Potash, Mosaic and Agrium have more than doubled since the beginning of 2007, whereas the S&P 500 Index has dipped slightly. Triple-digit gains haven't been restricted to the fertilizer companies, either. Seed producer Monsanto (MON, news, msgs), for example, has experienced a strong run as well, thanks in part to its dominance in the expensive biotech seed market.
So how has the agricultural boom affected mutual funds? To find out, we screened for funds with the largest total stake in agriculture, agriculture machinery and agrochemical stocks, as well as in fertilizer giants Potash, Mosaic and CF Industries (CF, news, msgs), which fall in the chemicals or mining industries.
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Not surprisingly, the two funds with the largest bets are sector-specific offerings, Fidelity Select Chemicals (FSCHX) and ICON Materials (ICBMX), which have 37% and 33% of assets in agriculture-oriented stocks, respectively. These funds, which fall in our midcap value category, have been among the group's best performers over trailing one-, three- and five-year periods.
To make things more interesting, we narrowed the list down to 10 diversified funds, listed in the following table.
| Category | Size ($ millions) | % of fund in ag-related investments | Category rank YTD* | Category rank over 1 year* | |
|---|---|---|---|---|---|
Bridgeway Aggressive Investors 1 (BRAGX) | Midcap growth | $332.20 | 23.16% | 81 | 33 |
Bridgeway Aggressive Investors 2 (BRAIX) | Midcap growth | $824.50 | 22.81% | 70 | 15 |
CGM Focus (CGMFX) | Large blend | $7,386.80 | 21.36% | 1 | 1 |
Janus Twenty (JAVLX) | Large growth | 12,966.50 | 20.59% | 1 | 1 |
Quaker Strategic Growth (QUAGX) | Large blend | $1,238.50 | 19.96% | 1 | 1 |
Janus Adviser Forty (JARTX) | Large growth | $6,410.90 | 19.77% | 1 | 1 |
Janus Adviser Aspen Forty (JACAX) | Large growth | $1,365.20 | 19.48% | 1 | 1 |
Fidelity Independence (FDFFX) | Large growth | $6,806.40 | 18.15% | 1 | 1 |
Shepherd Large Cap Growth (DOIGX) | Midcap growth | $8.50 | 18.05% | 58 | 45 |
Direxion HCM Freedom (HCMFX) | Large growth | $28.20 | 17.02% | 62 | 19 |
*Data as of May 23 |
Continued: Growth-oriented funds
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