MORE HEADLINES
Economic Update
The economy has not experienced a clear directional change.
Domestic Equity
U.S. equity returns were broadly positive in July.
International Equity
Only one of 23 developed countries produced a negative return in July.
Fixed Income
The investment grade corporate bond sector provided the strongest performance on the month.
Real Estate Securities
Real estate investment trusts outperformed the broad equity market in July.
Hedge Funds
July was another positive month for hedge funds as the flight to risk assets continued.
REVISITING COMMODITIES: INVESTMENT CHARACTERISTICS AND ROLES
Academics and practitioners have debated the role of commodities in institutional portfolios for many years with mixed conclusions. The increase in popularity in commodities can be seen through the proliferation of mutual funds and Exchange Traded Funds designed to track commodities, as well as fund flow data for the first half of 2009, which showed that commodities trailed only fixed income and emerging market equity strategies for total asset growth. Rising commodity prices in recent years have been attributed to hedge funds, speculators, and institutional investors moving into the asset class, resulting in the commodities bubble in 2008. Others contended that prices were driven by increased demand due to growth and industrialization in China and India.
