Given the weak performance of the stock markets ahead of budget negotiations, many investors are looking for exposure in commodities.
Although there are dozens of ETFs and ETNs in this segment, most fail to deliver adequate returns as they focus on front-month futures and roll contracts continually. This strategy can backfire if markets are in Contango, a condition where future prices are higher than spots prices, i.e. there are more consumers and buyers than sellers.
To overcome this problem, many firms have developed Contango killing products in the past. While these products have met with varying levels of success, legendary commodities trader and China bull Jim Rogers appears to finally turn the tide. Rogers has launched a plethora of commodity focused exchange traded products, which are both equity as well as futures-based in nature. RBS has thrown its weight behind Rogers and has launched five products that offer exposure to commodity indexes bearing the name of the hard assets investor.
These five products provide commodity exposure depending upon global economic cycles. The notes seek to maximize returns when the differential is highest between near-term contracts and further-term future contracts.
