Since commodities became a nascent asset class in the early 2000s, most institutional money, particularly pension funds, have gained exposure to it through long-only, passive indices, including the S&P GSCI, DJ-UBS and the Reuters-Jefferies CRB.

The investment case for indices was reinforced by Gary Gorton and K. Geert Rouwenhorst, of The Wharton School at the University of Pennsylvania and the Yale School of Management, who in their “Facts and Fantasies about Commodity Futures” paper studied how investing in a commodity index will affect investors’ portfolios.