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Discussion Starter #1
I am very intrigued by this new product from Claymore but am very cautious due to how poorly other ETFs holding futures contracts on commodities have performed (due to contango).

Claymore's strategy to reduce the effects of contango makes sense, by their 'contract roll optimization strategy' which I assume means higher turnover of futures contracts.

Open question,

How effective do you think this could be? Wait and see, or perhaps they will minimize the effects of contango enough to make this a viable investment for exposure to commodities?
 

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I am very intrigued by this new product from Claymore but am very cautious due to how poorly other ETFs holding futures contracts on commodities have performed (due to contango).

Claymore's strategy to reduce the effects of contango makes sense, by their 'contract roll optimization strategy' which I assume means higher turnover of futures contracts.

Open question,

How effective do you think this could be? Wait and see, or perhaps they will minimize the effects of contango enough to make this a viable investment for exposure to commodities?
Wait and see for me for 3 reasons: (1) I'm not at all convinced that Canadian investors need to add more exposure to commodities (provided their Canadian equity portion has commodity exposure) and (2) Too many investors are fishing in commodity futures through ETFs these days. It seems to me that so much demand will affect prices and past risk/return characteristics of commodities are not true anymore (this is a point Larry MacDonald makes) and (3) It remains to be seen how successful Claymore is in avoiding contango.
 

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Discussion Starter #3 (Edited)
All very valid points CC.

(1) I'm not at all convinced that Canadian investors need to add more exposure to commodities (provided their Canadian equity portion has commodity exposure)
I personally have quite little exposure to commodities, and little broad Canadian market exposure so CBR would actually be perfect for someone like me.

(2) Too many investors are fishing in commodity futures through ETFs these days. It seems to me that so much demand will affect prices and past risk/return characteristics of commodities are not true anymore
I believe this is true as well, but it is also happening among international equity markets also. The amount of correlation among NA, EAFE, emerging and developing markets grow every day. I haven't seen any recent studies, but last numbers I recall still show commodities as being less correlated to NA equities than many other asset classes.

(3) It remains to be seen how successful Claymore is in avoiding contango.
This truely is a wait and see. Just wondering if Claymore can be more effective at this than others. No real reason to believe so.
 

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this was interesting: http://etfdb.com/2010/jpmorgan-plans-physically-backed-copper-etf/

i guess these physically backed etfs are going to be the next big thing

perhaps this is a good reason to be leery of commodities since everyone wants to own them

i wonder if in the future when fiat currency is gone to hell in a hand basket ... will we be paying bills by trading shares in the thousands of warehouses around the world filled with physical goods like metals ?!

cc, your comment about commodity exposure in canadian equities has been very helpful to me, thank you

just the top ten holdings of xiu gives you exposure to gold, oil and fertilizer
 
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