Back to the Futures, With Less Risk

摘要

Commodities are hot right now, yet most individuals don't have a lot of ways to invest in them. Stocks of commodity producers don't always move in tandem with the underlying commodities, and a couple of mutual funds invest in bonds that are linked to commodity prices. Commodity futures―perhaps the purest play―engender more risk than most investors can stomach. One solution could be a new type of investment called Total Return Asset Contracts, which creator Merrill Lynch dubbed TRAKRS. Introduced last year, these are futures contracts that are linked to prices of commodities, stocks, and currencies, but with less risk than traditional derivatives. In addition, they have greater trading flexibility, more tax efficiency, and lower costs than mutual funds.