2017 Commodity Index Returns

After a summer swoon, commodity indexes recovered and finished 2017 unchanged to slightly up on the year.

VISTA= the Vista Commodity Excess Return Index

BCOM = the Bloomberg Commodity Excess Return Index

GSCI = the S&P GSCI Commodity Excess Return Index

The annual returns and standard deviation of annual returns since the 4/30/2009 inception of the Vista Index are presented in the table below. Returns are all continuously compounded. 

Returns VISTA BCOM GSCI         *2009 23.1% 23.0% 24.7% 2010 22.9% 15.4% 8.5% 2011 -4.1% -14.4% -1.2% 2012 1.5% -1.2% 0.0% 2013 -12.3% -10.1% -1.3% 2014 -19.3% -18.7% -40.2% 2015 -21.2% -28.4% -39.9% 2016 10.8% 10.8% 10.4% 2017 2.8% 0.7% 4.7% 3 Year -2.5% -5.6% -8.3% 5 Year -7.8% -9.1% -13.3% Standard Deviation 3 Year 13.6% 16.6% 22.5% 5 Year 12.6% 13.8% 22.2%

Since inception, Vista has beaten the BCOM 6 out of 8 years and the GSCI for 5 out of 8 years.  Vista's 3 and 5 year average returns beat them again, with strong margins.  Of note, Vista shows considerably less risk than either the BCOM or the GSCI.

Commodity returns for 2017 are shown in the following chart:

Of the fifteen commodity components within the Vista Commodity Index, seven, nearly half, ended the year with gains. Soybeans were the strongest performer up over 20%, while Frozen Concentrated Orange Juice was the weakest with a +30% decline.  

Conclusion

With any luck, 2018 can be a turning point for the commodity market building on the gains of the last two years. As low interest rates and low inflation give way to stimulus and increasing worldwide demand, commodities should gain a bid. Considering the all-time highs of most other markets, commodities may now be a timely investment.

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Disclaimer: The above is not investment advice, is for information purposes only, may be subject to change without notice, and, while prepared with care, may be subject to omissions and errors