It’s comprised entirely of coffee future contracts in the most nearby month. The fund is designed to reflect the performance of the Dow Jones Coffee Index. The expense ratio for this fund is 0.45%. Keep in mind that this index fund has no dividend yield because it doesn’t hold stocks.
Should you invest in coffee futures?
When you invest in coffee futures, you bet on what coffee will sell for at a future date. This strategy is the riskiest way to invest in coffee and offers the highest reward. Futures trading is for advanced investors.
Is iPath a risk factor for coffee futures?
Another possible risk factor is the shape of the coffee futures curve. A second similar ETN from iPath is the Pure Beta Coffee ETN (CAFE). The only difference here is that there is no pre-set rollover schedule for the futures contracts.
