Do ETFs Push Up the Price of Commodities?

By: ETFdb
With ETFs linked to nearly every commodity imaginable, previously hard-to-invest-in commodities now have the potential to be house-hold investments. While you used to need a futures trading account to trade oil, now anyone with an equity trading account can buy an oil ETF; same goes for gold as well as a host of other commodities [Download Everything You Need To Know About Commodities]. But does the added interest and easy access to commodities through ETFs push up the price of that commodity? Not all “ETFs” Are the Same While blanketed as ETFs, there are also commodity Exchange Traded Notes, known as ETNs. ETNs do not buy the physical commodity directly, but rather track a commodity index. For example, the iPath S&P GSCI Crude Oil Total Return ETN tracks the Goldman Sachs Crude Oil Return Index. While ETNs may draw investors’ interest to a commodity, thus having an impact in a [...] Click here to read the original article on ETFdb.com. Related Posts: 3 Simple Momentum ETF Trading Strategies This Week In ETFs: October 23rd Edition ETF Insider: Sell On The Pop Prospects January 21st Edition 5 Big ETFs That Still Aren’t Back To Pre-Crisis Levels 25 Wild ETF Charts From 1H 2013
With ETFs linked to nearly every commodity imaginable, previously hard-to-invest-in commodities now have the potential to be house-hold investments. While you used to need a futures trading account to trade oil, now anyone with an equity trading account can buy an oil ETF; same goes for gold as well as a host of other commodities [Download Everything You Need To Know About Commodities]. But does the added interest and easy access to commodities through ETFs push up the price of that commodity? Not all “ETFs” Are the Same While blanketed as ETFs, there are also commodity Exchange Traded Notes, known as ETNs. ETNs do not buy the physical commodity directly, but rather track a commodity index. For example, the iPath S&P GSCI Crude Oil Total Return ETN  tracks the Goldman Sachs Crude Oil Return Index. While ETNs may draw investors’ interest to a commodity, thus having an impact in a [...]

Click here to read the original article on ETFdb.com.

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