Overview

Commodities investment has been long an area where only very special professional (so called managed future investment) could access. Recently, this asset class has drawn intensive interests and research has indicated that allocating certain percentages in this asset would achieve better returns while reducing risk. Furthermore, with introduction of various ETFs/ETNs and some mutual funds specializing in commodities, it is much easier for investors to get exposure on this asset class now.

The popular and sometimes fascinating gold or gold bugs investing belong to this class.

The most popular strategies in commodities investing are technical factor based. ValidFi collects several well known strategies in this class including Turtle Trading System and S&P CTI.

Here is the list of commodities investment strategies

Tutorials

• Commodities as an asset class: Gary Gorton, Geert Rouwenhorst, "Facts and Fantasies about Commodity Futures", Yale University Research Paper, 2004.
• Technical trading in commodities: W.D.Gann's technical trading book

Categories of Commodities Investment Strategies

Most commodities investment strategies are technical based. ValidFi supports the following strategies:

• S&P Commodity Trend Indicator (CTI): this strategy is really part of a more broad base strategy called S&P DTI (Diversified Trend Indicator). It bases the past 7 month returns for each commodity and takes long or short positions accordingly. ValidFi models this technique using ETFs instead of futures contracts.
• Turtle Trading System: this is a well known technical trading system which has been used by a group of traders who named themselves as turtles. ValidFi models this using ETFs.