UBS and Bloomberg launch global commodity index family
Commodity index investment now expands beyond short-term futures contracts
UBS AG and Bloomberg L.P. today launched the UBS Bloomberg Constant Maturity Commodity Index ("CMCI") family - a highly innovative concept in commodity index investment. This global index family will not only cover a broad range of commodities, but will also introduce a time dimension by providing access to a range of different investment maturities for each of these commodities. This is combined with a revolutionary calculation methodology. The index family will be published in U.S. dollars and Euros (Bloomberg function CMCN [GO]).
Strong need for a new commodity index concept
Since the early nineties, the primary avenue available for investing in commodities has been via traditional indices. These indices performed well for a period of time, but over the last few years it has become increasingly clear that investors need diversification across maturities as well as across commodities; currently investors are 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.
A simple yet innovative solution to commodity investing
UBS and Bloomberg believe that the solution to many of the recent issues faced by investors lies not in creating increasingly complex vehicles, but in providing greater flexibility and choice. The UBS Bloomberg Constant Maturity Commodity Index allows investors to easily diversify across maturities and commodities and more efficiently adapt their commodity index investment to the current economic environment.
A benchmark of modern commodity investment
The CMCI is designed to be an international benchmark for modern commodity investment. It is composed of a basket of 28 commodity futures with a series of available investment maturities for each individual commodity using a highly innovative calculation methodology. This will allow investors much greater flexibility in their risk profile. The CMCI is weighted to reflect the relative importance of each individual commodity in the index to the world economy - with weights based on a blend of economic indicators (GDP, PPI, and CPI) as well as liquidity and open interest of the underlying futures contracts.
The UBS Bloomberg Constant Maturity Commodity Index (CMCI) provides investors with a new dimension of commodity investment and serves as a basis for a variety of investment products, such as structured products or investment funds.
As of 29 January 2007, the target weightings and available investment maturities for all commodities included in the CMCI are as follows:
For further information about the UBS Bloomberg Constant Maturity Commodity Index please visit www.ubs.com/cmci.
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