Despite rising prices for the commodity, exchange-traded funds dedicated to sugar have seen withdrawals, meaning investors have missed out on the latest surge in the commodity. Sugar prices have reached levels not seen in over ten years as a result of poor crops in Thailand and India brought on by the El Niño weather system's …
Despite rising prices for the commodity, exchange-traded funds dedicated to sugar have seen withdrawals, meaning investors have missed out on the latest surge in the commodity. Sugar prices have reached levels not seen in over ten years as a result of poor crops in Thailand and India brought on by the El Niño weather system’s reappearance and export limitations in India. According to investment flow data from Morningstar, some investors took advantage of the spike in sugar prices earlier in the year and left the market, thus they missed out on the second half of 2023’s gain. The Teucrium Sugar exchange traded fund (CANE) in the United States and the WisdomTree Sugar exchange traded commodity (SUGA) in the United Kingdom saw net outflows of $25 million for the year ending in October. Nevertheless, Morningstar reports that despite sharp price declines in late June, the two sugar investment vehicles managed to yield gains of almost 70%. Even though US ETF assets have generally increased, assets in US commodities ETFs have decreased overall, from roughly $141.8 billion in January 2022 to roughly $124.4 billion as of September 2023, according to Morningstar. The cost of other essential agricultural commodities, including wheat and maize, has fallen due to bumper crops in major producing nations, while the price of soft commodities, like sugar and cocoa, has surged to multiyear highs in recent months.
According to data from Invesco, funds for precious metals like gold have had withdrawals, although energy exchange-traded funds (ETFs) have recently performed well. Despite prices rising past spring highs, investors do not seem to have pursued performance in sugar-specific investment vehicles throughout the second half of the year. Commodity trading advisers and hedge fund traders made up the majority of investors in Teucrium’s specialty single-commodity funds, such as CANE. Aneeka Gupta, director of macroeconomic research at WisdomTree, admitted that investors appeared to have missed out on the increase in sugar prices and might not reinvest. She continued by speculating that the price of sugar would increase due to logistical issues impacting exports from Brazil, which has been making up for shortages in Thailand and India.
Risk Disclaimer :
Please note that this articles does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.
