Commodity index usually refers to a package of commodity prices (spot or futures) as a component, according to a certain weight, the average calculation index. The coverage of commodity index can be the whole commodity market, that is, the comprehensive index; It can also cover a commodity category or a single commodity, such as energy or metal index. Commodity futures prices have high transparency and good liquidity. Therefore, the compilation of commodity indexes is based on futures prices rather than spot prices.
What is commodity index investment?
Commodity index investment usually refers to the strategy of passively investing in commodity index futures or commodity index derivatives from the perspective of portfolio diversification. Around 2000, due to the weak dollar, the commodity market attracted more and more global attention, and investors urgently needed new investment fields. Because of the low correlation with other asset classes, commodities can effectively hedge inflation risks, and investors pay more and more attention to them. Commodity index investment provides an inherent return independent of technology. Therefore, commodities, as a unique asset class, have become new investment targets of index funds and hedge funds.
What are the characteristics of commodity index investment?
Commodity index investment is generally considered to have four main characteristics: first, long-term strategy is adopted in commodity futures market; Second, only use commodity futures; The third is full mortgage, that is, the face value of futures contracts purchased in the futures market is equal to the investment quota, that is, there is no leverage; Fourth, passive commodity index investment strategy, the main body of commodity index investment is institutional investors.
What are the products related to commodity index? What are the characteristics of each product?
Commodity index investment products can be roughly divided into on-site and off-site products according to different trading and operation methods. Commodity index futures and other on-market derivatives have the advantages of standardization, high transparency and low credit risk; Commodity index OTC derivatives have flexible terms and can provide tailor-made products for investors.
What is the main difference between commodity index futures and commodity futures?
First of all, the theme is different. The subject matter of commodity futures is usually a specific commodity, and commodity index futures take commodity index as the subject matter.
Secondly, the delivery methods are different. Domestic commodity futures are usually delivered in kind, while commodity index futures are delivered in cash.
Finally, compared with commodity futures, commodity index futures are more suitable for institutional investors to participate.
What impact does commodity index investment have on commodity market?
Traditionally, investors participate in the commodity futures market. Generally, producers hedge the risks of commodity production, while speculators take risks and gain risk value. Index investors usually participate in commodity markets for three reasons:
The first is to optimize the investment portfolio. Financial institutional investors holding commodity futures can improve the performance of their portfolios. Commodity futures contracts have better returns than bonds and less volatility than stocks and bonds.
The second is to hedge the inflation risk. Commodity investment is not only positively related to inflation rate, but also related to unexpected inflation rate, thus hedging the risk of inflation.
The third is to hedge other related risks. For example, commodity investment can improve the risk return of pension funds, optimize their investment portfolio and hedge against risks such as exchange rate changes.
What are the characteristics of the investment strategy of commodity index investors?
The investment strategies of commodity index investors are also different from those of ordinary market participants. Index investors generally obtain commodity future positions through swap dealers. Generally speaking, they only hold long positions, and hedgers and speculators will hold long positions and short positions. Index investors also benefit from hedgers and speculators in different ways. They buy futures contracts in earlier months, sell them before the expiration date, and then use the proceeds to buy new contracts and hold futures contracts in a "rolling" way.