A diamond exchange traded fund (ETF) could soon be an investor’s best friend if De Beers has any say in the matter.
The timing might not be better for a physically-backed diamond ETF. Investors seem to prefer physical investments to equities right now and commodities in general are attracting increasing interest.
Allen Seccombe for Mining MX reports that De Beers is reportedly considering a flood of requests from financial institutions to set up an investment instrument using diamonds. [Diamond Exposure For Those Who Can’t Wait.]
De Beers is considering offering ownership of its diamonds without physically taking receipt – similar to other physically-backed commodity ETFs – because much like precious metals, people view diamonds as a store of value. [Would Africa Benefit From A Diamond ETF?]
Diamond production and prices are up, making a diamond ETF particularly opportune.
Jeff Miller for Diamonds.Net reports that Harry Winston Diamond Corp. posted a 62% gain this year on increased revenue from the first quarter. Rough diamond prices also rose and there was a 17% increase in the volume of carats sold for the quarter. Production also jumped 14% in year over year.
Will De Beers bow to pressure? For now, we’ll watch and wait.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.