Commodity Investing: Understanding How Contango Impacts Returns

As interest in commodities as an investable asset class has increased in recent years, more and more investors have sought to educate themselves on the various ways to establish exposure to natural resources and the factors that impact prices of various investment vehicles. Many have embraced ETFs and ETNs as efficient options, gravitating towards low cost vehicles that offer low maintenance strategies and potential tax efficiencies. And while a prolonged rally in commodity markets has delighted many investors, some have expressed frustration over gaps between exchange-traded commodity products and hypothetical spot returns [see also Why Commodities Belong In Your Portfolio ].