More about creating a commodities index

There was an interesting article yesterday on Seeking Alpha about the perils of choosing a broad commodities index, a topic I covered yesterday. The author,,  rightly ridicules the  S&P GSCI index due to its severe over weighting of oil products. Additionally, the author cites the problem that the index has in rolling over futures contracts which leads to tracking errors in markets that are in contango. This is an issue that I did not address, although I was aware of it. However, it is interesting to note that the author points out that DBC does a relatively good job of handling rollover issues. As I mentioned yesterday, tracking commodities is not straightforward.

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to FurlAdd to Newsvine

This entry was posted in Asset Allocation and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s