Price Of iPath Cotton ETN Piping Hot


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With U.S. cotton futures trading limit-up for two straight sessions and prices at a new record as weather-related supply jitters grip a market fueled by surging emerging markets demand, investors are turning to the iPath Dow Jones-UBS Cotton Subindex Total Return ETN (NYSEArca:BAL).

BAL jumped today $3.63, or 6.1 percent, to $62.91, after the exchange-traded note gained more than 4 percent on Friday. The ETN, whose price is based on cotton futures, has gained more than 60 percent in the past three months, according to data compiled by

Creations on Friday surged to $2.9 million, bringing total assets in the fund to $33.4 million. That's up from $20.9 million at the end of September. Through the first three quarters of 2010, the ETN suffered net outflows of $3.7 million, data compiled by show. The ETN is a debt obligation backed by the full faith and credit of its issuer, Barclays Bank, and delivers the exact return of its underlying index, minus expenses.

Cotton's move has turned parabolic in the past few sessions, as financial markets have fretted that bad weather in cotton-producing areas all over the world-from the U.S., the world's biggest exporter, to countries like Pakistan and China-would crimp supplies. Demand from emerging market countries, especially China, has been expanding. China is the world's No. 1 user.

Cotton futures are now higher than in the post-Reconstruction Era in the decade following the American Civil War.

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This article appears in: Investing , ETFs

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