As the end of the year draws closer, tensions in Washington D.C. are starting to boil as gridlock may push us over the much-feared “fiscal cliff” and back into recession. Diminishing hopes that policymakers can strike a deal before the deadline has kept a lid on confidence while prices have remained fairly stable, which may be setting up stock markets for a disastrous open in 2013. Amid the mixed landscape, Toronto-based Sprott Asset Management rolled out a physical platinum and palladium fund on the NYSE [for more economic news and analysis subscribe to our free newsletter].
Investor interest in commodities has surged in recent years, the result of both a prolonged rally in natural resource prices and the development of new vehicles that facilitate access to this asset class. Specifically, the launch of a robust lineup of exchange-traded products that utilize both physical commodities and commodity futures contracts has brought commodities to the masses; they’re no longer reserved for the largest and most sophisticated investors [see also Jim Rogers Says: Buy Commodities Now, Or You’ll Hate Yourself Later]. Commodities have obvious appeal to active investors looking to generate profits from short-term price movements; the volatility of this asset class is ideal for risk-tolerant individuals who actively monitor their positions. But commodities may also have appeal to the long-term, buy-and-hold crowd; this asset class has the potential to bring both diversification and return enhancement to traditional stock-and-bond portfolios.
Just a few short years after the introduction of the first exchange-traded commodity product, there are dozens of options available for investors interested in accessing this asset class that is capable of delivering big returns and meaningful diversification benefits. Most investors are familiar with only the largest and most popular of these products, but those willing to dig a bit deeper will uncover some very intriguing investment opportunities [see also Agricultural ETF Showdown: CROP vs. MOO]. Today we profile the DB Commodity Index Tracking Fund (DBC), one of the oldest and most popular broad-based commodity ETPs on the market.
Wind power is one of the most prevalent forms of alternative energy in the world, as numerous countries have taken major steps towards weening themselves off of fossil fuels. Currently, wind power amounts to just over 2% of the world’s energy supply, but at current robust growth rates, this figure is predicted to hit 8% by 2018. From the years 2000 to 2010, global wind power capacity has increased from just 17.4 GW to 194.4 GW, representing a 1,017% change, as this budding industry is enjoying exponential growth in a number of developed and emerging markets alike [see also Crude Oil Crushed: Buy or Sell?].
This article originally appeared on ETFdb.com. The latest innovation in the commodity ETP space came from UBS on Thursday, as the company rolled out a pair of products designed to exploit contango in two of the most heavily-traded energy futures markets. The new ETRACS Natural Gas Futures Contango ETN (GASZ) and ETRACS Oil Futures Contango ETN (OILZ) will be linked to indexes maintained by ISE that effectively maintain short exposure to front month contracts and long exposure to mid-term futures contracts.
Soybeans originated in Southeast Asia and Chinese farmers were the first to domesticate the plant and reap its rewards. The crop quickly became a staple in China, Japan, and Korea, while it wasn’t introduced in Europe until the 18th century. Soybeans quickly gained popularity and spread all over the world, reaching South America in the late 19th century. Today, Brazil and Argentina are top world producers of soybeans, while the United States leads the way in total production. Traditional uses include soy milk, tofu, and soy vegetable oil. Soybean meal is also a primary component of animal feed due to its valuable protein content and its relatively low-cost to produce. Interestingly enough, soybeans can produce roughly twice as much protein per acre as any other major vegetable or grain, making it incredibly appealing to producers and health-minded consumers.