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Un análisis exploratorio de los exchangeable trade funds y su influencia en el proceso de financiarización de commodities
[An exploratory analisys of the exchangeable trade funds and their influence in the commodities financilization process]

Author

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  • Rondinone, Gonzalo
  • Thomasz, Esteban Otto

Abstract

The aim of this paper is to provide comprehensive insights into the architecture and impact of a recent financial innovation known as commodity index. The motivation of this study is based on the impact that these instruments may have in the functioning of commodity markets, leading to what the literature has called “financialization of commodities”. Therefore, we first present the concept of financialization. Then, we describe the architecture of commodites index and the corresponding trading vehicle called Exchangeable Trade Funds. In the third section we introduce an exploratory analysis of recent trends and stylized facts of the evolution of the market. We conclude with possible impacts of those instruments on the market, opening the hypothesis that they can generate a major source of risk in the markets that already describe a high level of volatility.

Suggested Citation

  • Rondinone, Gonzalo & Thomasz, Esteban Otto, 2016. "Un análisis exploratorio de los exchangeable trade funds y su influencia en el proceso de financiarización de commodities [An exploratory analisys of the exchangeable trade funds and their influenc," MPRA Paper 72677, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:72677
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    References listed on IDEAS

    as
    1. James D. Hamilton, 2009. "Understanding Crude Oil Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 179-206.
    2. Algieri, Bernardina, 2012. "Price Volatility, Speculation and Excessive Speculation in Commodity Markets: sheep or shepherd behaviour?," Discussion Papers 124390, University of Bonn, Center for Development Research (ZEF).
    3. Silvennoinen, Annastiina & Thorp, Susan, 2013. "Financialization, crisis and commodity correlation dynamics," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 24(C), pages 42-65.
    4. Irwin, Scott H. & Sanders, Dwight R. & Merrin, Robert P., 2009. "Devil or Angel? The Role of Speculation in the Recent Commodity Price Boom (and Bust)," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(2), pages 377-391, August.
    5. Scott H. Irwin & Dwight R. Sanders, 2011. "Index Funds, Financialization, and Commodity Futures Markets," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(1), pages 1-31.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    exchangeable trade funds; financialization;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

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