Commodity Indices

Here you can find info about all the major commodity indices.

DJ-UBS Commodity Index

Background: The DJ-UBSCI is composed of commodity futures contracts on physical commodities, traded on U.S exchanges. The only exception is aluminum, nickel and zinc which are traded in London (LME). This index is based upon relative trading activity of individual commodites.

Components of DJ-UBSCI:
Aluminium, Coffee, Copper, Corn, Cotton, Crude Oil, Gold, Heating Oil, Lean Hogs, Live Cattle, Natural Gas, Nickel, Silver, Soybeans, Soybean Oil, Sugar, Unleaded Gasoline, Wheat and Zinc.

No single commodity may constitute less than 2% of the index and No related group of commodities (e.g., energy, precious metals, livestock or grains) may constitute more than 33% of the index.

Major advantages with DJ-UBSCI:
The main advantages of DJ-UBS Commodity Index is diversification, high liquidity, continuity and economic significant.

Major drawbacks:
The index is rebalanced annually, losing about 1.5% return compared to monthly rebalancing.

Continuous Commodity Index (CCI)

Background:
The CCI-index measure price movements of 22 commodities. It has been live since 1957 and was earlier called the CRB Index.

Weight in the Continuous Commodity Index:
Energy: 17,64 %, Grains 17,64 %, Livestock 11,76, Softs 29,4 and Metals 23,52.

Major drawback with CRB Index:
Soft commodities are over-represented and energy are under-represented. No single category are allowed to have over 33 % weight.

Major advantage with CRB Index:
Offer a way for investors to trade the CRB Index as a commodity future. Consist of a wide and diversified group of commodities, all under one contract.

S&P GSCI

Background: S&P and Goldman Sachs Commodity Index can be seen as a benchmark for investment performance in the commodity markets. S&P GSCI represents unleveraged, long-only investment in commodity futures that is broadly diversified across the spectrum of commodities.

Weight in the S&P GSCI: 24 commodities in total, where Energy stands for (70,44 %), Industrial Metals (8%), Precious Metals 3.68 %), Agriculture (12,76 %) and Livestock (5.11 %). See their website for more info.

Major advantage with S&P GSCI:
Fair weight, based on trading volume.

Major drawback with S&P GSCI:
Automatically gives more weight to commodities which have risen in price, but first when it might be too late?

Rogers Raw Materials Index (RRMI)

More info soon!