Exchange traded commodities (ETCs) issue debt securities that trade on exchange offering investors direct exposure to commodities. By investing in ETCs, a spokesman for iShares says investors gain the desired exposure without the need to trade physical commodities or commodity futures contracts.
An ETC can be either physically backed, or derivative-based. In the first case, a spokesman for iShares says physical ETCs will seek to track the daily movement of the spot price of the relevant commodity by holding and valuing the physical commodity...............................................Full Article: Source
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