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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:
- Changes in futures prices
- 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. 
Table 1. Commodity Index Returns 
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Open-ended mutual funds
- PIMCO CommodityRealReturn Strategy Fund Institutional (PCRIX) is an open-ended mutual fund which tracks Dow Jones–UBS Commodity Total Return Index with collateral in inflation-indexed bonds. Expense Ratio 0.79%. Available at Vanguard Brokerage Service for $25,000 initial investment and a transaction fee.
- PowerShares DB Commodity Index Tracking Fund (DBC) is an Exchange Traded Fund which tracks the Deutsche Bank Liquid Commodity Index - Optimum Yield Excess Return. The Index is a rules-based index composed of futures contracts on six of the most heavily-traded and important physical commodities in the world - crude oil, heating oil, gold, aluminum, corn and wheat. Expense Ratio 0.83%.
- iShares S&P GSCI Commodity-Indexed Trust (GSG) is an Exchange Traded Fund which tracks the S&P GSCI Total Return Index. Expense Ratio 0.75%.
- iPath Dow Jones–UBS Commodity Total Return Index ETN (DJP) is an Exchange Traded Note which tracks Dow Jones–UBS Commodity Total Return Index. The note is issued by Barclays Bank PLC. Expense Ratio 0.75%.
- ELEMENTS RICI-Total Return (RJI) is an Exchange Traded Note which tracks the Rogers International Commodity Index - Total Return. The index is composed of futures contracts of 36 different commodities and is weighted based on global commodity consumption. The note is issued by the Swedish Export Credit Corporation. Expense Ratio 0.75%.
- On Stuff by William J. Bernstein, 09/2006
- Commodities: Boom or Bust? by Jeremy Siegel, Ph.D, 04/19/2006
- Robert Greer Discusses the Benefits of Commodity Investing by Robert J. Greer, 03/01/2004
- What the Price of Gold Is Telling Us by Congressman Ron Paul, 04/25/2006
- Going Long on Commodities: Six ways to invest in commodities by Will Acworth, 05/15/2005
- A Rediscovered Asset Class: Commodity Futures by raddr, 02/04/2006
- Commodities As An Asset Class by Frank Armstrong, CFP, AIF, 07/15/2004
- Not All Commodity Indexes Are Created Equal (Part One of a Two Part Series) by Richard Feldman, CFP, MBA, AIF, 06/02/2006
- Are Commodities Futures Too Risky for Your Portfolio? Hogwash! by Knowledge@Wharton, 04/05/2006
- Contango, backwardation, and all that good stuff by Prof. James Hamilton, 06/12/2005
- CRB Indexes by CRB