The recent surge in popularity of commodities ETFs and the lack of understanding as to how they work is making them an "easy target" for criticism, according to ETF Securities (ETFS).
ETFS Marketing head of product and investment strategy Fred Jheon says media articles warning investors against commodity-based ETFs are "needlessly misdirecting" people away from the real issues affecting these products. Speaking at the Morningstar ETF conference held in Chicago, Jheon says the confusion stems from ETFs that hold futures and investors not completely understanding how they work. For example, when commodities are in contango - when an imminent futures contract is more expensive than an expiring contract - then the fund and the investors can experience a loss. Jheon ...
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