Over time, commodities have become more valued as investments by market participants, according to PIMCO’s Bob Greer. And he is a person who should know. Greer is a pioneer in distinguishing why commodity indexes are an asset class distinct from stocks and bonds, having spent the last ten years as the real returns manager for PIMCO, where he oversees around $16 billion in commodities funds. Before PIMCO, he spent eight years as a manager of commodity indexes for JPMorgan Chase and Daiwa Securities.
He is also the co-author of a new book about commodity indexes, “Intelligent Commodity Indexing: A Practical Guide to Investing in Commodities” in which he explains the marketplace for commodity indexes, and how it can be used with other strategies.
We talked with Greer about the growth in commodities investing in the video above. In it, he explains some of the reasons investors began to see commodities markets as something more than a price discovery mechanism for grain, metal and energy companies:
“Commodities as an investment have been around for quite a while, but their benefits of inflation protection and diversification have only become more appreciated in the last ten or so years as people have begun to worry about those things. And as people have become disappointed with the more traditional categories of financial assets.”
A look at trading volume in the Dow Jones-UBS Commodity Index supports his point:
Greer spoke more on commodity investment growth this week at the Commodity Investment Roundtable in Mexico City, an event co-sponsored by the Mexican Derivatives Exchange and CME Group.