What Are Livestock ETFs?
ETPs represent an easy and efficient way to gain exposure to livestock prices, and U.S. investors have multiple options to choose from. The iPath Dow Jones-UBS Livestock Total Reutrn ETN (COW) is the most popular option; this ETN offers exposure to an index comprised of futures on live cattle and lean hogs. The exposure offered by the E-TRACS UBS Bloomberg CMCI Livestock ETN (UBC) is substantially similar, though UBC is slightly cheaper from an expense perspective.
Investors should be aware that both UBC and COW are linked to indexes comprised of futures contracts, and as such will not necessarily replicate the performance of spot livestock prices. Moreover, both options are ETNs, meaning that investors are exposed to the credit risk of the issuing institution.
International investors seeking livestock exposure may have more options available; ETF Securities offers leveraged and inverse livestock ETPs in European markets.
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