1.1. Commodity Indices
The commodities indices consist of futures contracts on one or more commodities. The commodity indices could be equal, fixed, or price-weighted indexes, as determined by the deciding committee.
Each index has different weightings, resulting in different exposure, and thus different risk-return profiles. The index performance may differ from that of the underlying commodity due to the use of derivatives rather than physical commodities.
1.2. Real Estate/REIT Indices
The real estate indices mainly consist of appraisal indexes or the repeat sales indexes, mainly of the commercial properties; whereas the REIT indices consist of shares of publically traded REITs.
1.3. Hedge-Fund Indices
The hedge fund indices are mainly constructed on a broad global level or at a strategy level.
The hedge fund indices mainly rely on voluntary disclosure by the fund management companies. The hedge funds can choose which index to report the performance to; thus the constituent funds mainly determine the index and not the other way round. It has often been noticed that the poorly performing funds don’t often report their performance to the indices.