ETF Commodity Type: Cotton
ETFs are exchange-traded funds that track indexes, commodities, and bonds. ETFs are traded on stock exchanges and can be bought and sold like stocks. Cotton ETFs invest in cotton futures contracts. These ETFs provide exposure to the global cotton market. Cotton futures are used by producers and processors of cotton to hedge against price fluctuation. ETFs that invest in cotton futures track the price of cotton. When the price of cotton goes up, the ETF goes up. When the price of cotton goes down, the ETF goes down. ETFs are a convenient way for investors to get exposure to the commodity markets without having to trade futures contracts themselves. ETFs provide diversification and liquidity, and they can be traded like stocks.