Part of my retirement portfolio is invested in DBC Commodity Index Tracking Fund. Is there any chance you will be adding some type of proxy for this type of fund in the canned Monte Carlo assets?
Thanks,
Paul
Disclaimer: ESPlannerBASIC, ESPlanner, ESPlannerPLUS and ESPlannerPRO, are educational calculators designed to give users input in mapping out financial futures, but should not be acted upon as a complete financial plan. The creators of these programs are not certified, registered, authorized, or any other type of financial planners. These programs are simply tools for helping you think through economic futures. Its "recommendations" should be viewed as informative inputs into your own decision-making with respect to saving and the purchase of life insurance. ESPlannerBASIC, ESPlanner, ESPlannerPLUS and ESPlannerPRO provide neither economic, financial nor tax advice, which can only be delivered to you by authorized professionals.
RSS
We're looking at a Commodities index for inclusion in a later release but it may not be this particular index.
Best,
Dick Munroe
I happened to also own DBC and did some research on your question. I created a user defined asset class based on the statistical values I could find for DBC, not on any commodities index.
You may not want to use a commodities index because, unlike stock and bond indexes, the statistical values, e.g. mean, standard deviation, of each index can vary greatly. And none of the indexes may be a good proxy for DBC. For a short explanation see “No Such Thing as Commodity Beta” on page 25 and the “Inconsistent Commodities” figure on page 26 in http://corporate.morningstar.com/us/documents/MethodologyDocuments/Resea....
I also did some testing of what happens with and without using the commodities asset class I created and there’s not much difference. Unless commodities are a large share of your asset allocation it probably won’t change your output very much either.
Also, if you want some theoretical underpinning that commodities do improve your risk/return but maybe not by enough to make it worth including in ESPlanner modeling see table 17 page 44 in http://corporate.morningstar.com/ib/documents/MethodologyDocuments/IBBAs....
Greg
Thanks, Greg. I would like to do a user defined asset, but I'm a bit of a newbie at doing so, and a little unsure of what figures to utilize.
Based on the "fund card" here:
http://dbfunds.db.com/Dbc/Pdfs/DBC_Fact_Sheet.pdf
Does one use the beta of 0.63 and the variance of 0.46 relative to the S&P 500? Also, since the fund history is so short, do I really want to use the -0.46% annualized return since February 2006?
Paul