As well as diversifying across a broad selection of 26 commodities, the CMCI also creates scope for diversification across different maturities. Instead of concentrating on near-dated futures contracts as conventional indices do, the CMCI allows you to distribute your exposure right along the time line, up to a maximum of five years ahead. This gives you the opportunity to improve your investment returns.

The constant maturity principle.

Conventional indices are cyclical. Front-month contracts are bought and sold monthly. This principle frequently leads to lower returns. The CMCI, by contrast, is based on a rolling process that reduces the negative effects and can more realistically reflect the actual price trend on the commodity market.

The animation below illustrates the two principles. Click on the button to advance. The chart shows a futures curve such as might be found in the energy sector. As time progresses, the futures contracts move along the curve from right to left.

You can find more detail about the constant maturity process in the methodology section.