Three of the most widely followed alternative investment classes are commodities, real estate, and hedge funds.
Commodity Indexes
Commodity indexes consist of futures contracts on one or more commodities, such as agricultural products (rice, wheat, sugar), livestock (cattle, hogs), precious and common metals (gold, silver, copper), and energy commodities (crude oil, natural gas).
Real Estate Investment Trust Indexes
Real estate indexes represent not only the market for real estate securities but also the market for real estate—a highly illiquid market and asset class with infrequent transactions and pricing information. Real estate indexes can be categorised as appraisal indexes, repeat sales indexes, and real estate investment trust (REIT) indexes.
Hedge Fund Indexes
Hedge fund indexes reflect the returns on hedge funds. Hedge funds are private investment vehicles that typically use leverage and long and short investment strategies.
