Comparing commodity indexes throws up useful factors in taking into account fundamentals of the futures markets

An analysis of commodity indexes shows third-generation indexes accurately take into account the fundamentals of commodity futures markets by going long backwardated assets and short contangoed ones.


The rising interest of institutional investors for commodities since the early 2000s prompted remarkable financial engineering in the commodity index space which is now in its third generation. Broadly speaking, first-generation commodity indexes are long-only and do not pay much attention to the fundamentals of backwardation1 and contango.

The second-generation indexes are also long-only but attempt to lessen the negative blow on performance of contango while exploiting backwardation. The third

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here