I don't think that RJI outperforming DBC is incorrect... please read the following:

http://seekingalpha.com/article/54527-a-rundown-of-broad-commodities-indexes

which states that the index that RJI is based on actually led the pack (including DBC)...

 

 

Personally speaking, does it really matter whether DJP, DBC or RJI is superior? :)   The fact is, commodities provide valuable asset diversification and can enhance your long-term returns regardless of which of diversified basket of commodities you pick. When you consider that they they'll probably account for 10% or less of your portfolio, why spend countless hours trying to decide?

I didn't choose any of the ETF options discussed, but decided to go with PCRDX. Is there a cheaper way to obtain commodities exposure? Probably. Is there an alternative which can perform better? Probably. But the fact is, these issues aren't that critical to me. Obtaining the 10% exposure to an index of commodities was important. I spent much more time trying to understand the characteristics and importance of commodities as an asset class than I ever spent selecting the product.

But hey, what do I know? :)

 

sensei:

Personally speaking, does it really matter whether DJP, DBC or RJI is superior? :)   The fact is, commodities provide valuable asset diversification and can enhance your long-term returns regardless of which of diversified basket of commodities you pick. When you consider that they they'll probably account for 10% or less of your portfolio, why spend countless hours trying to decide?

Well said.  Sometimes people on these boards are like kids in kindergarten comparing who/what is better...

PCRIX is a good option - I didn't have access to that share class, only the very expensive PCRDX, so I had to look elsewhere.

mase

sensei:

Personally speaking, does it really matter whether DJP, DBC or RJI is superior? :)   The fact is, commodities provide valuable asset diversification and can enhance your long-term returns regardless of which of diversified basket of commodities you pick. When you consider that they they'll probably account for 10% or less of your portfolio, why spend countless hours trying to decide?

Personally speaking, what matters is the effect that adding an investment has on the return and volatility of my portfolio.

I did not spend countless hours trying to decide among the commodity futures funds.  Historically, one of the three options listed above would have reduced the volatility of my portfolio much less than the other options.

Arbitrarily choosing  one option may result in choosing one with a significantly lower diversification benefit than the others.  It may not have made a significant difference to your protfolio, but it would have made a significant difference to mine.

Let me clarify my comments.

The commodity fund (PCRDX) which is in my portfolio attempts to mirror the DJ AIG Commodity Index. If one chooses an ETF which elects to use that index, or another similar commodities index, then what difference doe it make?

There may be other ETFs or funds which choose to juice their returns by overweighting a specific commdity, but that's an entirely different story. Likewise there are ETFs which focus on a single type of commodity, such as precious metals.  Again, a different situation.

I don't know if I've clarified my point to your satisfaction.

 

 

sensei:

Let me clarify my comments.

The commodity fund (PCRDX) which is in my portfolio attempts to mirror the DJ AIG Commodity Index. If one chooses an ETF which elects to use that index, or another similar commodities index, then what difference doe it make?

As far as I can tell, you don't have anything to clarify.  I responded to your question: "Personally speaking, does it really matter whether DJP, DBC or RJI is superior?"

The historical return and volatility of my protfolio would have been different depending or whether DJP, DBC, or RJI, the "three options", had been part of the portfolio.  One of those options would have had much less of a beneficial effect on the portfolio volatility than the other two.

For me (this is the personally speaking part), it would have mattered which of the three I had in my portfolio.

sensei:

There may be other ETFs or funds which choose to juice their returns by overweighting a specific commdity, but that's an entirely different story. Likewise there are ETFs which focus on a single type of commodity, such as precious metals.  Again, a different situation.

I don't know if I've clarified my point to your satisfaction.

In addition to the indexed tracked DJP, DBC, and RJI, I considered GSP (an ETN that tracks the GSCI) and modeled the PIMCO Commodity Real Return Strategy Fund as a combination of the DJAIG index and the Lehman Brothers TIPS index.  I did not consider any other commodity investments.

RJI is the fund not the index. The fund did not outperform DBC. 

RJI +0.28%, DJP +0.73%, DBC +0.91%, PCRDX +1.5%, RJA +3.26%. Any thoughts about their performance this week? Any pairing possibilities? RJA is the new Elements Rogers International Commodity Agriculture ETN (what a mouthful!).

i like gsg out of all of them

Mathjak, Why do you like GSG? It had a good year last year (+31%) but so far in 2008 it has been flat (-0.11%) losing -0.15% on Friday. Morningstar lists GSG's top holding as "Gsci Excess Retrn Mar11...98.78%" If you know what that represents, please explain. I wish Morningstar would develop a separate category for commodity funds instead of lumping them under specialty-natural resources.

it covers alot more products than dbc....    dbc moves very heavy with energy

Mathjak and Closer:

Thank you both for an interesting dialog on a subject I'm interested in. I'm looking for a mutual fund or ETF that invests in commodities directly rather than in the companies that own commodities. Also, I want one that, even if not top dog in its category, is not the most volatile one--which means avoiding those heavy (more than 1/3 of portfolio) in energy. I've looked at the major indexes in Rogers' book on commodities; I like his own index, but how to judge DJI's performance based on such a short span of time? A couple of questions: Do all the ETFs mentioned by you fellows deal in commodities? Does any one of them have a five-year or even three-year record? Would appreciate your advice.

emanon