Even though steroids have been banned, sort of, in baseball, spring is arriving, and the sap is rising both in maple trees and elsewhere. Natural impulses, combined with the first sustained commodity price rally in a quarter-century, have led to proclamations such as "Copper prices can go anywhere."
|Which Market Can 'Go Anywhere'? |
Commodity-Linked EquitiesIf the capacity to add value lies with the commodity's producer, processor and distributor rather than with the commodity itself, a theme emphasized frequently in this space, then commodity-linked equities should be tempting. The Goldman Sachs Resource Index (GSR), the basis for the iShares exchange-traded fund (IGE), can serve as a reasonable approximation for such equities, even though its composition is of necessity skewed toward the oil and gas sector, with no distinction made among producers, refiners and integrated firms.
|Goldman Sachs Resource Index Industry Composition |