Today we briefly examine the Livestock sub-sector within the greater Commodity space, which is an area of investment via ETPs that we imagine many investors are not yet aware of.
While many institutional managers as well as registered reps are likely familiar with trading futures based on the Livestock markets, investing directly via ETPs is a much newer theme.
Reps that are not licensed to sell commodity futures but have clients that are either speculators if not natural hedgers in the livestock markets, will likely at least take some interest in the availability of Livestock based ETPs in the marketplace.
COW (iPath DJ-UBS Livestock Total Return Sub-Index ETN, Expense Ratio 0.75%) is the most tenured ETP in this space, debuting back in 2007.
The fund remains somewhat small, with only $53.8 million under management, averaging about 26,000 shares traded on a daily basis.
Since this is niche oriented as well as an ETN and not an ETF, it is perhaps somewhat expected that asset growth over time would be slow going.
COW is designed to track the returns of two listed Livestock commodity futures (Lean Hogs and Live Cattle) and at times the fund has displayed significant intraday volatility, likely due to the poor timing of ETF orders and/or the approach used when executing such orders (we suspect that market orders on a few thousand shares at a time often enter the market on this particular ETN, especially at sub-optimal trading times, which can potentially cause some ugly intraday candlestick charts).