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Cotton ETN (BAL) Hits a 52-Week High
iPath Series B Bloomberg Cotton Subindex Total Return ETN is probably a suitable pick for investors looking for momentum. The fund just hit a 52-week high and is up 48.7% from its 52-week low price of $38.55/share.
Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed:
BAL in Focus
The fund is designed to provide exposure to the Bloomberg Cotton Subindex Total Return. It has AUM of $16.6 million and charges 45 basis points in annual fees.
Why the Move?
The U.S. cotton exports have hit the highest level of 16.4 million bales in 15 years in 2020-21 driven by a surge in global imports (per an article on Fibre2Fashion.com). The world’s largest economy witnessed a large portion of demand for cotton from China (the highest in eight years), with a large chunk of requirements for U.S. cotton driven mainly by China’s State Reserve. This is making funds like BAL an attractive investment option.
More Gains Ahead?
It seems like the fund will remain strong, with a positive weighted alpha of 44.84, which gives cues of a further rally.