Investors are getting interested. I'll add them to my stock listings at My Yahoo! to see how they do.
Merrill Lynch launches biofuels indices
Financial management and advisory firm Merrill Lynch on Monday
introduced two indices designed to offer investors exposure to the
fast-growing biofuels market.
The company said that investors seeking to profit from rapid
expansion in the ethanol and biodiesel industries typically had to
recur to traditional agricultural commodity indices or
futures.
“Such instruments are vulnerable to very negative roll
returns, or negative carry, due to the storage dynamics of the
underlying agricultural commodity markets,” it stated.
Head of global commodity research at Merrill Lynch,
Francisco Blanch, said, however, that the
firm’s indices had been designed to mitigate the negative
roll returns inherent to many agricultural commodities
markets.
“They also offer additional returns by overweighting crops
that produce the most energy in biofuel production, notably sugar
and soybeans.”
The MLCX Biofuels Index weights commodities according to production
levels and calorific potential, in order to reflect their economic
value.
It contains seven commodities commonly used as biofuels feedstock,
such as sugar, corn, soybeans, barley, rapeseed, canola and soybean
oil. The MLCX Biofuels Plus Index adds gasoline and diesel to the
commodities in the MLCX Biofuels Index. The MLCX Biofuels Plus
Index reflects how current technology and infrastructure is more
geared to blending biofuels with conventional fossil fuels than to
offering a pure biofuel alternative.
