Diversification benefits of commodities

Investment portfolios that include commodities deliver a six per cent average increase in risk-adjusted returns for investors. The finding comes from a study co-authored by a researcher at Queen Mary University of London (QMUL). Thursday 28 September 2017 The research shows that certain commodity strategies make investors better off when included in portfolios that consist of stocks, bonds, and cash. The study is published in the Journal of Empirical Finance and is co-authored by Professor George Skiadopoulos from the School of Economics and Finance at QMUL. In contrast to the previous research on this subject, this study does not pose restrictive assumptions about investors' preferences and assets distribution. Investments in commodities have increased over the last number of years. A number of commodity investment vehicles have been developed for institutional investors to accelerate this growth - most notably commodity indices.