{'fraction_non_alphanumeric': 0.0316702819956616, 'fraction_numerical': 0.008676789587852495, 'mean_word_length': 5.588571428571429, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
The Performance of Energy and Non-Energy Based Commodity Investment Vehicles in Periods of Inflation

wide range of arguments exist for investing in commodities as an asset class (Huberman [1995], A Strongin [1995], and Greer [1994]). In brief, it is generally argued that commodity investment may offer unique returns relative to other traditional investments such as stocks and bonds especially during periods of inflation. For instance, Froot [1995] researched the properties of various alternative assets (e.g., real estate) as an inflation hedge in well-diversified portfolios. Froot concluded that oil and production-weighted indexes of commodity futures are among the most potent hedges of financial portfolios. Extending this research, Schneeweis and Spurgin [1997] examined the correlations of oil-based futures contracts with energy related and non-energy related stock, bond, real estate and commodity markets, and the Consumer Price Index (CPI). They conclude that various commodity-based investment vehicles such as energy-based commodity index products provide a better returns than traditional stock, bond, or real estate security investments (e.g., -ITS) in periods of high inflation as well as in periods of unexpected changes in inflation. In this article, the performance of various commodity indexes and commodity investment products are studied under periods of inflation. Briefly put, investment in commodities can range from direct “long only” passive investment, to managed “long only” passive commodity index investment, to more actively managed “long only” commodity investment, as well as investment positions such as energy commodity trading advisors that include both passive and actively managed futures and options contracts. In contrast to stock and bond investments, results show that while various long only commodity investments (e.g., commodity indexes) often provide positive returns during periods of both high inflation and increasing inflation, that also provide relatively low returns during periods of low inflation and declining inflation. In contrast, more actively managed commodity positions, which include both long and short investment positions in commodity products, often provide positive returns in periods of rapidly increasing or decreasing inflation.