isenberg school of management university massachusetts amherst 01003 tel 413 577 3166 fax 1350 email info cisdm org web www center for international securities and derivatives markets the benefits commodity investment 2006 update research department original may 2002 current abstract in recent years investable indices linked assets have increased number available based products this paper provides both theoretical empirical basis inclusion commodities investor portfolios results show that direct can provide significant portfolio diversification to traditional stock bond return opportunities beyond those achievable from also risk simple inflation hedging impact index is shown be dependent on relative structure eg sector allocations reweightings as well degree which are static or dynamic reweighted expected price movements lastly roll potential returns long bias
