Monday, November 13, 2006

Calpers board approves commodities investments

Pension and endowment funds are increasingly turning to the commodities sector in a bid to boost their investment returns.

Bloomberg reports that the California Public Employees' Retirement System has decided to set up a pilot commodities investment program. Calpers is the largest US public pension, so this decision is likely to carry some weight with the boards of pension and endowment funds across the country.

The increased acceptance of commodities as an "asset class" was forecasted by investor Jim Rogers in his 2004 book, Hot Commodities.

At that time, Rogers pointed out that an increasing body of academic and professional research had legitimized the case for commodities investment, which meant that investment institutions would increasingly climb aboard.

This recent news is evidence of that trend unfolding.