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Commodities, natural resources, and hedge fund strategies

Alternative investments · Lesson 3 of 3

Lesson 3 of 3

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Lesson 3 of 3 · Alternative investments

Commodities, natural resources, and hedge fund strategies

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By the end you’ll be able to

describe the main ways investors obtain commodity exposure, including direct holdings, futures-based strategies, commodity-linked investments, and equity exposure to commodity-producing firms
explain the components of commodity returns, including spot return, collateral return, and roll return, and interpret the effects of contango and backwardation

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distinguish between commodities and natural resources investments and explain the return drivers and risks of natural resource investments such as energy, metals, agriculture, timberland, and farmland

describe the major hedge fund strategy classifications, including event-driven, relative value, macro, equity hedge, and other common groupings, and explain how they seek to generate returns

compare hedge fund strategies on the basis of directional exposure, leverage, liquidity, use of short selling, and sensitivity to market, credit, and volatility conditions

evaluate the diversification benefits and major risks of commodities, natural resources, and hedge fund strategies, including liquidity risk, leverage risk, counterparty risk, operational risk, and manager risk

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