SWITZERLAND - UBS and Bloomberg have launched a new range of commodities indices to combat perceived limitations in traditional benchmark products.
The UBS Bloomberg Constant Maturity Commodity Index family introduces a time dimension by providing access to a range of different investment maturities for a wide range of commodities.
Over the last five years an estimated $120bn (€92.8bn) has flowed into funds and segregated accounts benchmarked against the likes of GSCI, Dow Jones-AIG and Reuters/Jefferies CRB indices. Investors have included Dutch pension giants: ABP, PGGM and PME.
Much of the attraction of tracking these indices is embedded in the roll; the income earned from rolling one short-term contract just before expiry to the next. UBS and Bloomberg are looking to offer investors more diversity in duration and the opportunity to adjust their investments in tune with economic indicators.
The Indices comprise exposure to 28 commodities, weighted by economic importance as measured by a variety of indicators. They are calculated in US dollars and euros.