- No-cost financial planning and automated investing
- $0 commission on stocks, ETFs and options
- Get up to $1,000 in stock when you fund a new account within 30 days
Cotton makes up around half of the fiber used in the production of our clothes and other fabrics. 20 million tons is harvested and traded each year; for comparison, that is around 20 T-shirts for each human being annually.
Due to its demand, cotton has a large and fairly stable presence on the stock market, making it a favorite for investors. You can buy or sell an interest in cotton through a variety of investment vehicles.
1. Cotton stocks
Stocks are a common option for investors, taking back the control you lose when investing in ETFs while also remaining less risky than futures. While stocks run a comfortable middle ground between the other options, they are still vulnerable to market movements and should be approached with a bit of market knowledge.
Cotton is a massive industry and will continue to be as long as we choose to wear clothes. There are plenty of brokerages offering a selection of company stocks for you to choose from, and with its prevalence, cotton may be a good place to start. Here are some of the biggest names in the industry:
- Cotton manufacturers
- Albany International (AIN)
- Unifi (UFI)
- Culp (CULP)
- Textile- and clothing-focused brands
- Ralph Lauren (RL)
- Columbia Sportswear (COLM)
- Tapestry (TPR)
- Gildan (GIL)
- Hanesbrands (HBI)
- PVH Corp. (PVH)
- A range of company stocks to choose from.
- Withdraw from the market whenever you want.
- Stable and conventional approach to investing.
- Investment control.
- While futures are certainly more dangerous, stocks still have their risks. Market fluctuations are unavoidable and can have a real impact on your investment.
- Trade options, futures, options on futures, stocks, ETFs
- $0 commission to close options
- Get $100-$5,000 when you open an account with $5,000 to $1,000,000+
- Trade stocks, bonds, options, ETFs, crypto, Treasurys, collectibles, royalties
- AI-powered analysis tools
- Get up to $10,000 cash when you transfer your account to Public
2. Cotton ETFs
Instead of investing in the stock of one or two companies, ETFs give you the option of placing your money with a bundle of assets.
ETFs are a simpler way of entering the market. While they work much like regular stocks, ETFs are protected from market movements through diversification — they don’t rely on the performance of one company.
If you are still learning the basics of investing, then ETFs are a great introduction. Cotton is a massive industry that’s been around for a long time, so it may be a good place to start. Here are a few options to consider:
- Cotton price ETF
- iPath Series B Bloomberg Cotton Subindex Total Return ETN (BAL), which tracks the price of cotton
- Overall agriculture ETFs
- Elements Agriculture Total Return (RJA), which tracks an index of agricultural commodities where cotton is a major component
- Invesco DB Agriculture Fund (DBA), which tracks an index of agricultural commodities where cotton is a minor component
- By bundling stocks from different companies together, ETFs give you access to a larger part of the industry.
- ETFs are considered by some to be the safest choice for investors.
- Because you are investing in a collection of stocks, you lose some of the control you might have had with a single company’s stock.
3. Cotton futures
Futures are one of the riskier methods of investing, and while they can be very profitable, they can just as easily lose you a lot of money. Futures trading is more commonly the domain of cotton farmers or manufacturers, though investors and speculators can also buy and sell futures contracts through select brokerage accounts. Only a few mainstream brokerage accounts allow futures trading alongside stocks, ETFs and options.
By investing in futures, you are agreeing to buy a commodity at an agreed price to receive directly at a later date. If the price you agree to buy at ends up being lower than the price of the commodity when you receive it, you will have made a solid return; however, the market may go against you and you could end up paying more than necessary.
Futures operate on both buyer knowledge and luck. If you are new to investing, it is recommended you learn the ropes before considering futures as an option.
- Investing in futures gives you complete ownership over a commodity.
- If you make the right investment, futures can bring you solid returns.
- There is a real element of gambling present in futures, and you can end up paying dearly for a mistake.
- Futures expire if they aren’t used within a certain period of time, becoming worthless.
Compare these providers for access to cotton ETFs and more
Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.
Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
How much is cotton worth now?
Reasons to invest
- Cotton is a staple commodity that is almost always in demand.
- Demand in fast-developing countries like China and India is likely to outpace their ability to produce cotton.
- Consequences of climate change could disrupt the production of cotton in various places around the world, stifling its supply and causing higher prices.
Is cotton a safe investment?
- Stockpiles: Countries hoarding cotton can influence prices if they decide to withhold their stockpiles during a shortage or put them on the market when there is no domestic demand.
- Subsidies: Policies to keep prices low and supply high can be altered over time, influencing prices both positively and negatively.
- Substitutes: Synthetic materials such as polyester can undercut the price of cotton and weaken its market share. Large but struggling economies can drastically influence prices if they switch to a cheaper material.
- Environment: Weather shifts will influence pollination, growth and yield, subsequently impacting supply.
- External influences: Other industries can have an influence on cotton prices. If oil becomes more expensive, the harvesting and production costs for cotton can rise as a result. It is a good idea to keep an eye on relevant industries.
Cotton is an in-demand staple you can invest in by purchasing stocks, futures and ETFs. But keep an eye out for shifts in competing industries and commodities that could impact the market.
Explore your investing options across trading platforms and commodities before you make a decision.
Frequently asked questions
More guides on Finder
Did you know a 7-year-old law might mean you’ll pay more in taxes in 2026?
5 tips to cut taxes even if the Tax Cuts and Jobs Act expires.
4 no-brainer money moves beginner investors should consider in 2024
If you’re new to investing you need to read this.
7 things every successful investor should know
Smart investments moves you need to know about.
Here’s what you need to know about the spot bitcoin ETFs
The spot bitcoin ETFs have been approved. What does this mean for bitcoin’s price, and should you buy in?
Are you prepared to invest if the market crashes?
How can you get your finances squared away in the event of a market crash?
Should You Raid Your 401(k)? Know the Pros and Cons
Learn all about what you should, and shouldn’t do, with your 401(k) retirement plan.
5 unexpected money moves that pay off
Make the most of what you have with these unconventional tips.
6 alternative investing platforms to try
We bring you six alternative investing platforms worth trying to diversify your portfolio.
An investment platform that lets users buy and sell shares of fine art.
The Warren Buffett Series
The life story of one of the most successful investors in the world.
Ask an Expert