COW “reflects the returns that are potentially available through an unleveraged investment in the futures contracts on livestock commodities. The Index is currently composed of two livestock commodities contracts (lean hogs and live cattle) which are included in the Dow Jones-UBS Commodity Index Total Return,” according to iPath.
Looking at a typical cattle cycle, COW could have another year of upside ahead of it.
“Given that the average cattle cycle consists of five years of declining cattle followed by five years of an increase in cattle herds, a five year bull market will be followed by a five year bear market. As we are currently in the fourth straight year of increasing cattle prices and declining cattle herds, another year can be expected to complete the five-year cycle,” notes Lionfin Capital.
iPath Dow Jones-UBS Livestock Total Return Sub-Index ETN
ETF Trends editorial team contributed to this post.