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Commodity price index
 
 
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A commodity price index is a fixed Mandan weight index or (weighted) average of selected commodity
Commodity

A commodity is anything for which there is demand, but which is supplied without qualitative product differentiation across a market. It is a product that is the same no matter who produces it, such as petroleum, notebook paper, or milk....
 prices, which may be spot or futures prices. It is designed to be representative of the broad commodity asset class or a specific subset of commodities, such as energy or metals.

The constituents in a commodity price index can be broadly grouped into the following categories:



Investors can choose to obtain a passive exposure to these commodity price indices through a total return swap
Total return swap

Total return swap, or TRS , or total rate of return swap, or TRORS, is a financial contract which transfers both the credit risk and market risk of an underlying asset....
.






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A commodity price index is a fixed Mandan weight index or (weighted) average of selected commodity
Commodity

A commodity is anything for which there is demand, but which is supplied without qualitative product differentiation across a market. It is a product that is the same no matter who produces it, such as petroleum, notebook paper, or milk....
 prices, which may be spot or futures prices. It is designed to be representative of the broad commodity asset class or a specific subset of commodities, such as energy or metals.

The constituents in a commodity price index can be broadly grouped into the following categories:
  • Energy
  • Metals
  • Base Metals
  • Precious Metals


  • Agriculture
  • Grains
  • Softs
  • Livestock


Investors can choose to obtain a passive exposure to these commodity price indices through a total return swap
Total return swap

Total return swap, or TRS , or total rate of return swap, or TRORS, is a financial contract which transfers both the credit risk and market risk of an underlying asset....
. 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
Inflation

In economics, inflation is a rise in the general price level of goods and services in an economy over a period of time. The term "inflation" once referred to increases in the money supply ; however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflatio...
. The disadvantages include a negative roll yield due to contango
Contango

Contango is a term used in the futures market to describe an upward sloping forward curve . Such a forward curve is said to be "in contango" ....
 in certain commodities, although this can be reduced by active management techniques, such as reducing the weights of certain constituents (e.g. precious and base metals) in the index.

Indices

  • Commin Commodity Index
  • Dow Jones-AIG Commodity Index
    Dow Jones-AIG Commodity Index

    The Dow Jones - American International Group Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market....
  • Goldman Sachs Commodity Index
    Goldman Sachs Commodity Index

    The S&P GSCI serves as a benchmark for investment in the commodity markets and as a measure of commodity performance over time. It is a tradable index that is readily available to market participants of the Chicago Mercantile Exchange....
  • Reuters/Jefferies CRB Index
  • Rogers International Commodity Index
    Rogers International Commodity Index

    The Rogers International Commodity Index is a composite, USD based, total return index, designed by Jim Rogers on July 31st, 1998.The index was designed to meet the need for consistent investing in a broad-based international vehicle....
  • Standard & Poor's Commodity Index
    Standard & Poor's Commodity Index

    The Standard & Poor's Commodity Index is a commodity price index that measures the price changes in a cross section of agricultural and industrial commodities with actively traded U.S....
  • NCDEX Commodity Index
    NCDEX Commodity Index

    The NCDEX Commodity Index is an equal-weighted spot price index of 20 agricultural commodities convering different groups such as oils and oilseeds, fibres, etc....
  • Deutsche Bank Liquid Commodity Index (DBLCI)
    Deutsche Bank Liquid Commodity Index

    The Deutsche Bank Liquid Commodity Index was launched in February 2003.It tracks the performance of six commodities in the energy, precious metals, industrial...
  • UBS Bloomberg Constant Maturity Commodity Index (CMCI)


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