Enhancing index stock portfolios with futures by Donald L. Jones and Timothy L. Walsh
ARTICLE SYNOPSIS ...Enhancing index stock portfolios with futures
by Donald L. Jones and Timothy L. Walsh
The benefits of diversification are well known: most investment managers diversify by including bonds
and cash in a stock portfolio already diversified across many industry groups. Less well known is the fact
that managed commodity futures portfolios are an attractive diversification candidate that can lead to a
disproportionately large increase in return while simultaneously reducing risk. Thus, stock portfolio
managers, regardless of their degree of risk-aversion, should consider futures to improve the ret...