Commodity fund specialist Van Eck Global launched a new index-based, open-end mutual fund, the Van Eck CM Commodity Index Fund on Friday, hoping to temper and some recent negative market performances that have reduced index returns for investors.
The fund launched under the tickers CMCAX, COMIX, and CMCYX and seeks to reduce an effect in commodities trading called contango, which happens when a maturing futures contract price exceeds the expected spot price. Contango can stifle returns for commodities investors, as it did on the iShares S&P GSCI Commodity-Indexed ETF, for several years. Indeed, returns on that index were reduced annually by 8%, said Kristen Capuano, a managing director at Van Eck, who is also in charge of product development and marketing. “To me, that is a serious problem,” she said in a telephone call earlier today.
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