GemShares Patents Opens Up Possibility of Diamond ETFs (WSJ)

The company is patenting an index that would allow diamonds to become tradable assets.

Diamonds may soon become exchange-traded funds, according to the Wall Street Journal. GemShares, a financial company, is patenting its index for turning the commodity, which are difficult to price in a standard manner, into a tradable asset. Rich investors have 5% of their assets in diamonds, according to a survey by Barclays Wealth. 

The diamond securities market will probably first lure producers and dealers of the jewels seeking to hedge against price drops, but in time, speculative or investment demand could be a possibility. GemShares has not yet determined when the securities will be ready, but the Journal predicts the ETFs could be selling by mid-2013.

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