Commodity diversification: How Kenya can exploit commodities for diversification.
Date
2015
Authors
Kuhunya, Lisa Wangari
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Investment in commodities dates back to the age of barter trade and has continually evolved to form an investmentwith substantial diversification benefits to investors · {Vrugt, Bauer, Steenkamp, & Molenaar, 2004). Commodity markets have become an attractive investment, as they offer returns not easily accessible through the traditional equity and bond investments {Schneeweis, Karavas, & Georgiev, Updated 2002). Defining characteristics of the return on commodity investment include relatively high performance and low volatility as opposed to those of equities and bonds. Inclusion of these commodities in an equity or fixed income portfolio would therefore be important to improve the risk adjusted return of the latter portfolios.