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Collateralized debt obligations (CDOs) are structured products that are issued by a special purpose vehicle with the objective of improving the issuer’s balance sheet, increasing access to illiquid securities, and/or generating a higher yield than would be offered in a traditional fixed income security. This chapter provides an overview of CDOs including a discussion on the history, structure, uses, and impact on investors and the broader financial system. CDOs can be further classified by the type of security held as collateral, such as collateralized bond obligations (CBOs), which typically hold high yield debt, and collateralized loan obligations (CLOs), which hold bank loans. These financial structured products gain notoriety for their role in the financial crisis of 2007–2008 and have since declined in popularity. Despite the negative perception that CDOs carry, securitization continues to play an important function in the financial system and offers benefits to issuers and consumers as long as both parties use the end product responsibly.

Commodity exchange-traded funds (ETCs), which debuted in 2004, enable investors to access an asset class previously difficult or expensive to access. Although a small segment of the overall exchange-traded fund (ETF) universe, ETCs have grown in popularity with both speculators and investors looking for long-term portfolio diversification. Examples of the types of commodities that are now accessible through ETCs include gold, oil, and agricultural. The literature on ETCs is limited, but academic and industry work has centered on using futures contracts to replicate the performance of the underlying commodities spot price as well as the effect additional capital has had on the integrity of the futures market. This chapter covers this topic by reviewing the growth, investment strategies, and regulatory structure of ETCs as well as the underlying effects these funds have had on the underlying markets with which they engage.