Great rewards of contrarianism

A run up in the commodities sector and oil markets has inspired a raft of new funds. In the past year alone, there have been 26 commodity funds launched, according to data from Lipper. Most have been ETFs or exchange-traded notes, including a series of Barclays iPath exchange-traded notes that track everything from aluminum to coffee to sugar.

Products that offer some promise of principal protection are even starting to crop up again as the market environment worsens. Equity indexed annuities and variable annuities that offer guaranteed minimum benefit withdrawal benefits are gaining in popularity and number as baby boomers seek out products that protect their retirement savings while paying out an income stream.

Anyone involved in the sales, marketing or distribution of mutual funds has, at one time, uttered, “past performance is not a guarantee of future results”. But product trends in the fund industry raise serious doubts as to whether anyone truly believes those words.