The Handbook of Commodity Investing

Preface

The Handbook of Commodity Investing provides an overview of the basics and foundations of commodity investing, as well as recent theory and empirical evidence on the commodity markets. The chapters are written by leading practitioners and academics, and explain the complexities of commodity investments, their associated risks, and how investors can optimize their portfolios by including different types of commodity investments. Each chapter contains valuable information relevant to both practitioners, who are currently using or contemplating using commodities as part of their asset allocation, and academics, who are analyzing the commodity markets theoretically or empirically.

The book is divided into six parts. Part One covers the mechanics of the commodity markets. Chapter 1, by Frank Fabozzi, Roland Füss, and Dieter Kaiser, is a primer on the basics of commodity investing. The authors provide insight into the market participants, commodity sectors, commodity exchanges, return components of commodity futures, and the risk and performance characteristics of the sectors. The chapter concludes that, based on a Markowitz mean-variance analysis, commodity futures can yield diversification benefits in a traditional investor portfolio consisting of U.S. and global equities, bonds, and a riskless asset. In Chapter 2, Mark Anson discusses the pricing and economics of commodity futures. Chapter 3, by Joshua Woodard, provides a review of commodity investments in the context of a ...