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Commodity investments: opportunities for Indian institutional investors

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  • Mukherjee, Dr. Kedar nath

Abstract

An attempt has been made to establish the fact that by investing in commodities or it alternative channels, institutional investors like banks can not only compensate for the lower risk-free returns in their major chunk of investments in Government securities, but also will be able to diversify some amount of their portfolio risk which is expected to rise by taking exposure in commodity market. The results exhibited in all the tables and figures clearly depict that investment in alternative channels like commodity indices or commodity futures contracts in India will not only allow the institutional investors to leverage their portfolio return, but also will ensure that diversification benefits is achieved. Therefore, even if investment in direct commodities are restricted for Indian banks, but still there is a significant opportunity for them to invest in the available alternative channels like commodity indices or commodity futures contracts.

Suggested Citation

  • Mukherjee, Dr. Kedar nath, 2011. "Commodity investments: opportunities for Indian institutional investors," MPRA Paper 33510, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:33510
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    References listed on IDEAS

    as
    1. Mr. Shaun K. Roache, 2008. "Commodities and the Market Price of Risk," IMF Working Papers 2008/221, International Monetary Fund.
    2. Bruce Bjornson & Colin A. Carter, 1997. "New Evidence on Agricultural Commodity Return Performance under Time-Varying Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 918-930.
    3. Scott H. Irwin & B. Wade Brorsen, 1985. "Public futures funds," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 5(3), pages 463-485, September.
    4. Gary Gorton & K. Geert Rouwenhorst, 2004. "Facts and Fantasies about Commodity Futures," NBER Working Papers 10595, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Investment Portfolio; Commodity; Commodity Futures; Institutional Investors;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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