Investment guru and prominent commodities bull Jim Rogers has pointed to tight supply and central banks' money-printing spree as reasons for taking on physical assets. With exchange traded funds, investors can play this commodities outlook.
Specifically, there are several exchange traded products based on indices designed by Rogers. He developed the commodity benchmarks to track expected global consumption based on his research and personal experiences traveling the world. He has penned several books, including Investment Biker: Around the World with Jim Rogers.
Rogers' commodity indices are different from other benchmarks that weight by return or liquidity. His approach is to weight commodities based on consumption to provide diversification.
At the 2013 ETF Virtual Summit, Rogers pointed out that world governments have gotten to the habit of printing money to solve their economic problems. Moreover, Rogers believes that investors will find opportunities in natural resources as there are "supply
The Royal Bank of Scotland (RBS) introduced five new
exchange traded notes
(“ETNs”) on November 15. The new ETNS are based on “enhanced” versions of Rogers International Commodity Indexes (“RICI”). The underlying indexes were developed by RBS and American investor Jim Rogers in October 2007, and have been maintained on a daily basis the past five years.
These “enhanced” indexes provide exposure to futures contracts with varying maturities, and seek to maximize returns when there are significant price differences between near-dated and future-dated commodity contracts (contango and backwardation). A special rollover calendar is defined for each commodity to address certain conditions such as term structure, seasonality, and liquidity.
Jim Rogers and an RBS representative constitute the two-person Index Committee, which annually reviews and adjusts the composition and weightings of the underlying indexes. Annual weightings are determined based on the expected global demand of each commodity and are rebalanced twice
Oil and gas reserves around the world are growing scarcer by the minute, and people are looking to their governments for answers. However, leaders' responses are often motivated more by the desire to boost approval ratings than by the need to find real, long-term supply solutions. The individual investor may not have the power to shift the tone of the emotional debates surrounding the oil and gas industry, but he or she can devise a strategy to profit. Casey Research's Rick Rule, Marin Katusa and Louis James sat down with The Energy Report to discuss what it means to participate in a politicized market and how politics affect their buy and sell decisions.
The Energy Report: When it comes to energy, hasn't the sector always been steeped in politics? Or has the political environment made an even more pronounced impact since the 1970s, for example?