A commodity index fund is a fund whose assets are invested in financial instruments based on or linked to a commodity price index. In just about every case the index is in fact a commodity futures index.
You cannot invest in an index, but you can invest in a fund. A Commodity Index Fund is a fund which either buys and sells futures to replicate the performance of the index, or sometimes enters into swaps with investment banks who themselves then trade the futures. The biggest and best known such fund is the Pimco Real Return Strategy Fund. There are many other funds, such as:
A 2010 article in Harper's by Frederick Kaufman alleged that these Commodity Index funds were part of the global food crisis in 2008, including riots in 30 countries, a food price rise of 80 percent between 2005 and 2008, and an increased hunger rate. The article claimed that one mechanism involved was a 'demand shock' on wheat futures caused by the index funds, resulting in a 'contango' wheat market on the Chicago Mercantile Exchange. This allegedly caused prices of wheat to rise much higher than normal, defeating the purpose of the exchanges (price stabilization) in the first place.[1]
Futures Industry Associationedit
Leah McGrath Goodman, a reporter with experience covering commodities markets, described an experience writing about the Goldman Sachs Commodities Index in her book "The Asylum". Around 2007, she wrote an article for the Futures Industry Association trade magazine about the indexes. She concluded the massive amount of money in the indexes following the oil futures market dwarfed the actual oil futures market, by around 5 to 1. She alluded to the theories of Milton Friedman, who believed that inflation was caused by "too many dollars chasing after too few goods". She concluded that the indexes were apparently thus causing oil prices to rise. Her article was dropped after a man from the FIA magazine showed it "to people around Washington" and told her it would be "politically explosive".[2]
commodity, index, fund, commodity, index, fund, fund, whose, assets, invested, financial, instruments, based, linked, commodity, price, index, just, about, every, case, index, fact, commodity, futures, index, contents, funds, that, track, indexes, harper, arti. A commodity index fund is a fund whose assets are invested in financial instruments based on or linked to a commodity price index In just about every case the index is in fact a commodity futures index Contents 1 Funds that track indexes 2 Harper s article 3 Futures Industry Association 4 See also 5 Refs 6 External linksFunds that track indexes editYou cannot invest in an index but you can invest in a fund A Commodity Index Fund is a fund which either buys and sells futures to replicate the performance of the index or sometimes enters into swaps with investment banks who themselves then trade the futures The biggest and best known such fund is the Pimco Real Return Strategy Fund There are many other funds such as Oppenheimer 1 iShares S amp P GSCI Commodity Indexes Fund 1 Barclays 1 JP Morgan 1994 1 These are very different from and should not be confused with commodity funds that hold real assets oil refineries farms forests etc such as Chase Physical Commodity Index 1 Bear Stearns 1 Harper s article editA 2010 article in Harper s by Frederick Kaufman alleged that these Commodity Index funds were part of the global food crisis in 2008 including riots in 30 countries a food price rise of 80 percent between 2005 and 2008 and an increased hunger rate The article claimed that one mechanism involved was a demand shock on wheat futures caused by the index funds resulting in a contango wheat market on the Chicago Mercantile Exchange This allegedly caused prices of wheat to rise much higher than normal defeating the purpose of the exchanges price stabilization in the first place 1 Futures Industry Association editLeah McGrath Goodman a reporter with experience covering commodities markets described an experience writing about the Goldman Sachs Commodities Index in her book The Asylum Around 2007 she wrote an article for the Futures Industry Association trade magazine about the indexes She concluded the massive amount of money in the indexes following the oil futures market dwarfed the actual oil futures market by around 5 to 1 She alluded to the theories of Milton Friedman who believed that inflation was caused by too many dollars chasing after too few goods She concluded that the indexes were apparently thus causing oil prices to rise Her article was dropped after a man from the FIA magazine showed it to people around Washington and told her it would be politically explosive 2 See also editContangoRefs edit a b c d e f g The Food Bubble Frederick Kaufman Harper s 2010 July The Asylum Leah McGrath Goodman 2011 Harper Collins p 327 328External links editThe Food Bubble How Wall Street Starved Millions and Got Away With It video report with Frederick Kaufman by Democracy Now PIMCO Real Return Strategy Fund Jeffries CRB Index DJUBS Index GSCI Facts and Fantasies Gary Gorton iShares S amp P GSCI Fund Retrieved from https en wikipedia org w index php title Commodity index fund amp oldid 925946315, wikipedia, wiki, book, books, library,
