Investors tracking maturity-enhanced commodity indexes face liquidity risk

Speculative commodity indexes

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There has been a “titanic wave of speculative money that has flowed into the commodities futures markets and driven up prices dramatically,” according to A White in the Capital Hill Hearing Testimony (July 10, 2008).

While the responsibility of long-only commodity indexers for the 2006-08 unprecedented rise in commodity prices is still open to debate, a general view is that commodity index trading prevailed more in 2008 than ever before.

Over the years, the case for commodity investing had become

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