Asset Allocation - Reading 17

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crosstheevil

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A long swap position reflects commodity-like exposure to asset class ? Can anyone explain it to me in layman’s terms? Thanks
 
You’re paying a fixed or floating rate and receiving the return on the asset class. Just as you would if you owned the asset class (and borrowed the cash to buy it).
 
S2000magician wrote:
You’re paying a fixed or floating rate and receiving the return on the asset class. Just as you would if you owned the asset class (and borrowed the cash to buy it).
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Thank you! Bear with me a bit more, I suppose the reference to commodity here is because you would borrow money to buy commodities …
 
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