Commodities are attracting a growing number of institutional investors. Over the past five years the largest pension funds and endowments allocated a small part of their assets (typically 1%-3%) to commodities.
A number of smaller pension funds are contemplating a similar move. The decision to invest in commodities hinges on two issues:
• Do commodity futures benefit a strategic portfolio?
• Is now an opportune time to invest in commodities?
The first question has been the subject of interesting aca