I have to wonder that this would be extremely difficult. I think trading things off the periodic table of elements is easy; Silver, Gold, Palladium, etc. I’m doubtful they’ll be able to pull this off on a large scale with Diamonds.
this is just another gimmick… have a look at all the contracts tradable on the cboe/cme and there are futures for “everything”… unfortunatly most are illiquid
This would not have the same quantity and standardization issues, since the fund would only need to appraise diamonds in its inventory. Of course, it seems like there might still be some pricing innaccuracy, since it would be difficult to get live quotes on all those diamonds at all times. If they rely on cut/clarity/color, there might still be some difference or subjectivity.