The success of early stage Biofuel Fund companies has spawned a host of lookalikes.

European-based Schroders’ Alternative Solutions Agricultural fund, which was one of the operators to launch a biofuel fund, has such success they had to close the fund early.

Richard Spurgin, finance professor at Clark University in Massachusetts and a commodity-index consultant, explains that first-generation biofuel indexes aren’t made up of fuels. Ethanol is traded in futures market, but not heavily, so green-fuel indexes include feedstocks, such as corn, sugar and soybeans. Wheat, though not widely used as a raw material for fuel, is sometimes included.

“The early biofuel indexes and funds were a bit ahead of their time,” Spurgin said. “Biofuel index values, and the value of funds that track them, are determined more by weather than by demand for biofuel. Investors with money in biofuel funds today have more exposure to grain markets, than to energy markets.”

Grain prices have sagged from their late-June peak, but world raw sugar futures are buoyant again, and corn and sugar land values are fetching high prices.