Seasonal Commodities in Mutual Funds : A Feasibility Study of using seasonal commodities as basis for a commodity fund
Halme, Julius (2018)
Metropolia Ammattikorkeakoulu
2018
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2018113019192
https://urn.fi/URN:NBN:fi:amk-2018113019192
Tiivistelmä
At the time of writing this thesis, commodities are regarded as a minor alternative investment strategy. While mutual funds are the easiest way for an individual to invest, very few funds utilize the potential of commodities. The purpose of this thesis was to examine and study the current practices relating to seasonal commodities and the use of seasonal commodities in commodity funds. The research aimed to answer the question: “Is it possible to create a mutual fund around the seasonality of commodities and make it beneficial for all parties involved?”
First part of the research was designed to collect data through interviews to establish the current state. Secondly a literature review was conducted to provide a baseline for a conceptual framework and lastly this thesis’ research ends in building the proposal.
The result of the current state analysis was a comprehensive study into both domestic and foreign commodities funds and their use of seasonal commodities in their investment strategies. That along with the current state interviews provided a good foundation to build the literature review on. Most of the topics, such as Margin-To-Equity, were uncovered in the current state analysis and were researched further to build the conceptual framework. Proposal was built based on the conceptual framework and its viability checked through quantitative studies conducted with data gathered from Seasonalgo and Bloomberg.
The research shows that it is in fact possible to create a mutual fund around the seasonality of commodities. The strategy formulated through the process certainly has room for improvement, but the scope of this thesis is to assess the viability of such an idea and certainly not to optimize it.
This thesis contributes well into the academic dilemma where commodities are regarded with high potential for diversification and profit but at the same time commodities represent a much underutilized asset class.
First part of the research was designed to collect data through interviews to establish the current state. Secondly a literature review was conducted to provide a baseline for a conceptual framework and lastly this thesis’ research ends in building the proposal.
The result of the current state analysis was a comprehensive study into both domestic and foreign commodities funds and their use of seasonal commodities in their investment strategies. That along with the current state interviews provided a good foundation to build the literature review on. Most of the topics, such as Margin-To-Equity, were uncovered in the current state analysis and were researched further to build the conceptual framework. Proposal was built based on the conceptual framework and its viability checked through quantitative studies conducted with data gathered from Seasonalgo and Bloomberg.
The research shows that it is in fact possible to create a mutual fund around the seasonality of commodities. The strategy formulated through the process certainly has room for improvement, but the scope of this thesis is to assess the viability of such an idea and certainly not to optimize it.
This thesis contributes well into the academic dilemma where commodities are regarded with high potential for diversification and profit but at the same time commodities represent a much underutilized asset class.