The fund is a fully collateralised, UCITS eligible Exchange Traded Commodity (ETC) designed to provide investors with a total return exposure to Cotton futures contracts. It aims to replicate the Bloomberg Cotton Sub Total Return Index by tracking the Bloomberg Cotton Sub Excess Return Index.
Fund Exposure
The fund is exposed to the movement in the price of cotton futures contracts used in the Bloomberg Commodity Index. It provides exposure to the commodity through futures contracts that are continuously rolled on a pre-determined schedule to maintain continuous exposure. The fund may be affected by market trends such as contango or backwardation, which can impact the value of the Index and, consequently, the fund.
Risks
Investors should be aware of the risks associated with this fund, including market risk, liquidity risk, counterparty risk, and credit risk. The value of securities in the fund is directly affected by the value of the Index, and there is no certainty that securities can always be bought or sold on a stock exchange. Additionally, the fund is reliant on swap counterparties to enter into swap agreements, and there is a risk of third-party service providers failing to return property or collateral.