Multi-alpha strategies dominate commodity index developments

Combining uncorrelated strategies into one to extract value

Some banks are turning to enhanced alpha strategies that aim to outperform traditional commodity benchmarks by combining uncorrelated investment strategies.

"Enhanced indexes are a very big trend," says Marc Pantic, head of cross asset solutions at Société Générale Index in Paris. "Benchmark indexes have recently shown some poor performances, especially because of contango in the commodity market, and that has led first-generation indexes to underperform compared to the commodities they should