Research and publications
The Risks of Commodity Investing
This article covers investment in commodities through futures contracts. It notes the unique sources of risk and return for such investments and also discusses the factors that one should take into consideration before deciding upon how much of a portfolio should be in commodities. We will see how an investment in commodities can be used as either a diversifier for a traditional portfolio or as a source of returns, depending on the market environment. Finally, it is argued that some of the considerations that apply to equity investing are also relevant for commodity investing.
Author(s):
Hilary Till and Joseph Eagleeye
Summary:
This article covers investment in commodities through futures contracts. It notes the unique sources of risk and return for such investments and also discusses the factors that one should take into consideration before deciding upon how much of a portfolio should be in commodities. We will see how an investment in commodities can be used as either a diversifier for a traditional portfolio or as a source of returns, depending on the market environment. Finally, it is argued that some of the considerations that apply to equity investing are also relevant for commodity investing.
Register to download PDF
Register/Log in| Type : | Working paper |
|---|---|
| Date : | 08/04/2006 |
| Keywords : |
Commodities |
About EDHEC
Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the world’s top 15 business schools. Fully international and directly connected to the business world, EDHEC commands a strong reputation for research excellence and the ability to train entrepreneurs and managers capable of breaking new ground. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching is inspired by its research work and a focus on “learning by doing”, all with the aim of equipping people with the skills to succeed in business.
