The Fundamental Elements of a Commodity Investment Process
By Hilary Till, Solich Scholar, J.P. Morgan Center for Commodities, University of Colorado Denver Business School
This digest article covers how to further distill returns in the commodity markets beyond that which is available through passive exposures to various commodity sectors. A manager can potentially do so through the use of well-chosen entry and exit rules, trade construction, and downside risk management. In addition, an actively managed commodity portfolio will tend to have dynamic exposures to the various commodity sectors, given the seasonal nature of a number of commodity trading opportunities.
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