UBS, Bloomberg Launch Commodity Index

Paul Adams

30 January 2007

UBS and Bloomberg have launched the UBS Bloomberg Constant Maturity Commodity Index family. This global index family will cover a broad range of commodities and introduce a time dimension by providing access to a range of different investment maturities for each of these commodities. This is combined with a new calculation methodology. The index family will be published in US dollars and euros. Until now investors have been limited to short-dated maturities in the traditional indices. The limitation to short-dated maturities has had several negative repercussions for the investor and more recently has been responsible for a significant deterioration of overall returns, say the companies. The new index family will allow investors to diversify across maturities and commodities and adapt their commodity index investment to the current economic environment. The CMCI is composed of a basket of 28 commodity futures with a series of available investment maturities for each individual commodity. This will allow investors more flexibility in their risk profile. Weighting reflects the relative importance of each individual commodity in the index to the world economy as well as liquidity and open interest of the underlying futures contracts.