Geert Rouwenhorst Opens NYSE to Celebrate Commodity ETF with Ties to SOM Research

K. Geert Rouwenhorst, deputy dean for curriculum development, professor of finance, and deputy director of the International Center for Finance at Yale SOM, rang the Opening Bell of the New York Stock Exchange on August 23 in honor of the recent launch of the United States Commodity Index Fund (USCI) on the NYSE Acra exchange.

The USCI tracks the performance of the SummerHaven Dynamic Commodity Index, a portfolio of 14 commodity futures selected each month from a pool of 27 eligible commodities. The design of the SummerHaven index was developed based on two seminal academic research studies by Rouwenhorst and Professor Gary Gorton. Their widely cited paper "Facts and Fantasies about Commodity Futures" found that commodity futures produce the same returns as equities with less risk, and offer a diversification benefit because their returns are negatively correlated with those of stocks and bonds. "The Fundamentals of Commodity Futures Returns" with Fumio Hayashi of the University of Tokyo showed that commodity futures returns vary depending on the physical inventory of the commodity in the economy; returns are greater when low inventories make prices more volatile.

"This is the culmination of bringing our commodities research to the market," said Rouwenhorst, who is a partner in SummerHaven Index Management LLC.