Economics, Econometrics and Finance
8 years ago

Index funds in commodity markets linked to lower volatility, not bubbles.

The Journal of Alternative Investments
The Impact of Index Funds in Commodity Futures Markets: <i>A Systems Approach</i>
Dwight R. Sanders, Scott H. Irwin

Paper Summary

Index funds in commodity futures markets are not causing bubbles in prices. New data analysis shows no clear link between index fund positions and market returns. Surprisingly, larger index fund positions may actually reduce market volatility.

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