Commodities

From Bogleheads
Jump to: navigation, search

Risks

Role in a portfolio

Commodity spot prices, as an asset class, do not generate a real return. Commodity mutual funds and ETF's invest in futures contracts that derive excess returns over the risk free rate of return from two sources:

  1. Changes in futures prices
  2. The roll yield—which can be either positive or negative—that results from replacing an expiring contract with a further out contract in order to avoid physical delivery yet maintain positions in the futures markets. [1]


Table 1. Commodity Index Returns [2]


(View Google Spreadsheet in browser, then File --> Download as to download the file.)


Funds

Open-ended mutual funds

ETFs

ETNs

References

External links

Articles

Bibliography

White papers
Academic papers