They are similar to stock market indices but track the price of a basket of specific commodities.
These indexes are often traded on exchanges, allowing investors to gain easier access to commodities without having to enter the futures market.
The advantages of a passive commodity index exposure include negative correlation with other asset classes such as equities and bonds, as well as protection against inflation.
[2] They were both employed as consultants to AIG Financial Products (AIG-FP), which was responsible for managing the DJAIG Index.
Gorton's other role was to provide AIG-FP with the mathematical modelling expertise underpinning the construction of "Super-Senior" credit derivatives linked to mortgage-backed securities so as to ensure AIG was not exposed to risk of loss.