Although I had sold off most of my direct share investments recently (to simplify my record keeping and tax returns) I couldn't resist having a bit of a bet that the Russian invasion of Ukraine will create global food shortages in the short-medium term, due to the fact that Russia and Ukraine both export a large fraction of the world's food and fertilizer supplies. Both countries will suffer reduced production and exports due to the war - Ukraine due to the direct impact of the invasion, and Russia due to the economic sanctions imposed on it in response.
So, I just placed an order for about $10,000 of a global agricultural index fund listed on the Australian stock market. The investment objective of the BetaShares Global Agriculture Companies ETF - Currency Hedged (FOOD.AX) is to provide an investment return that aims to track the performance of the Nasdaq Global ex-Australia Agriculture Companies Hedged AUD Index, before taking into account fees and expenses.
There has already been a substantial run-up in the stock price since the start of the war, and it has risen another 4% since I first thought about buying the stock on Friday. But I'm reasonably confident there is potential to outperform relative to the broader stock market over the next 1-2 years. The amount of any potential gain or loss is rather trivial on a $10,000 investment (I only had about $15,000 lending capacity on my margin loan account, and didn't want to go 'all in' and risk a margin call), but it will be interesting to see if the price moves as I expect over the next 1-2 years.
I do feel a bit guilty about potentially making a profit as a result of a war, even if indirectly. At least I made a donation to a Ukraine relief charity last month, so 'on balance' I don't feel too morally bankrupt making this investment.
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