The Investment Benefits of the LMEX Index

Abstract

One of the most attractive aspects of commodity investment today is that there are now a number of passive indexes that are fully investable. The LMEX index is a narrowly focused index that offers returns based on a basket of industrial metals (aluminum, copper, nickel, zinc, tin, and lead). The index is constructed using futures contracts traded on the London Metals Exchange. This article presents the risk and return benefits of the LMEX index as an addition to existing stock and bond portfolios.