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English to Chinese translations [PRO] Bus/Financial - Finance (general)
English term or phrase:total return fully collateralized indices
The two major types of commodity futures indices are spot price indices and total return fully collateralized indices. Spot price indices measure the price movement in a basket of commodities. Total return fully collateralized indices measure the return of a passive investment strategy. The strategy invests in a basket of commodity futures contracts that are rolled over into new commodity futures contracts on an ongoing basis. The term “fully collateralized” indicates that an amount equivalent to the notional investment in futures has been set aside as collateral. A commodity futures investment that is not fully collateralized implies the use of leverage.
Exposure to a fully collateralized total return commodity index results in return drivers beyond a pure exposure to the price fluctuations of the underlying commodities.
The two primary sources of return for a fully collateralized commodity total return index are the return on the collateral and the return associated with the passive rules-based trading strategy of rolling over futures positions (i.e. closing out maturing contracts and opening corresponding contracts with longer maturities).