Investors should steer clear of iPath Bloomberg Sugar Subindex Total Return ETN for now. The fund recently hit a new 52-week low. Shares of SGG are down roughly 35.6% from its 52-week high of $37.77/share.

But is more pain in store for this ETF? Let’s take a quick look at the fund and the near-term outlook to get a better idea of where it might be headed.

SGG in Focus

SGG focuses on providing exposure to sugar futures and tracks the Dow Jones-UBS Sugar Subindex Total Return index. SGG charges 75 basis points in fee per year and has AUM of $64.1 million (see all Agricultural ETFs here).

Why the move?

Sugar prices have been falling lately, as multiple concerns are bothering the commodity’s market. Overproduction concerns and muted demand in Brazil and India, the world’s largest and second largest sugar producers respectively, have been weighing on sugar prices. Adding to the agony, weak economic fundamentals in Brazil also remain an overhang on sugar prices. 

More Losses Ahead?

SGG has a weighted alpha of -34.00. Moreover, the fund has a Zacks ETF Rank #4 (Sell) with a High risk outlook. So, the outlook for this fund remains quite bleak.

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