Commodity-Backed Bond

Looking for an investment that literally turns paper into gold? Well, a commodity-backed bond might just be the ticket for you. Also known as asset bonds, these are debt securities that are linked directly to physical commodities.

Companies that produce gold, oil, and other commodities will issue debt that is backed by the underlying asset. These bonds typically have five-year maturity periods, and the interest rate can rise and fall if the price of the commodity shifts.