Trade of the Month: Commodity indexes
Tim Mortimer analyses the benefits of accessing commodities through indexes
In this second article on structured products based on commodities, we consider products linked to commodity indexes.
Although equities are the most popular and natural choice for retail products, commodities are a good niche choice for two main reasons. First, when the increase in value of commodities is very strong, and second as a diversification from equities. Because commodity prices often exhibit complex pricing patterns driven by supply and demand, many commodity indexes have been created
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