Index Investment and the Financialization of Commodities

Index Investment and the Financialization of Commodities

The authors found that, concurrent with the rapidly growing index investment in commodity markets since the early 2000s, prices of non-energy commodity futures in the United States have become increasingly correlated with oil prices; this trend has been significantly more pronounced for commodities...

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Veröffentlicht in:Financial analysts journal 2012-11, Vol.68 (6), p.54-74
Hauptverfasser: Tang, Ke, Xiong, Wei
Format: Artikel
Sprache:eng
Schlagworte:
Alternative Investments
Commodities
Commodity futures
Commodity markets
Commodity prices
Crude oil
Economic crisis
Economic indices
Emerging markets
Energy
Energy industry
Financial investments
Futures contracts
Hedging
Indexes
Inflation
Institutional investments
Investors
Risk premiums
Securities markets
Soybeans
Stock market indices
Stocks
Studies
Volatility
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Beschreibung
Zusammenfassung:The authors found that, concurrent with the rapidly growing index investment in commodity markets since the early 2000s, prices of non-energy commodity futures in the United States have become increasingly correlated with oil prices; this trend has been significantly more pronounced for commodities in two popular commodity indices. This finding refiects the financialization of the commodity markets and helps explain the large increase in the price volatility of non-energy commodities around 2008.
ISSN:0015-198X
1938-3312
DOI:10.2469/faj.v68.n6.5