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

Fundamental comparison

big-data

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-

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