Providing greater insight into the performance of international commodity markets, Standard & Poor’s, the world’s leading index provider, announced today the launch of an extended family of sub-indices based on the….
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S&P World Commodity Index (“S&P WCI”). The S&P WCI family of indices now includes the single commodity indices and sector indices, as well as regional indices in Asia and Europe.
Launched in May 2010, the S&P WCI is the first index to consist solely of listed commodity futures contracts that trade outside of the U.S.
“The launch of the S&P WCI is the result of Standard & Poor’s meeting the market’s needs for an international commodity index that would complement the U.S. focused S&P GSCI, providing all-world commodity exposure,” says Michael McGlone, Director of Commodity Indexing at S&P Indices. “The S&P WCI family now includes all the mono and sector indices but notably, the regionally traded commodities in separate S&P WCI Asia and S&P WCI Europe indices.”
The S&P WCI is a rules-based, world-production-weighted commodity index. It includes 22 commodities covering the Agriculture, Energy, Precious Metals and Industrial Metals sectors, listed on eight international exchanges and traded in six currencies in Asia, Europe, and North America. While the S&P GSCI is comprised of only U.S. dollar based commodities, the S&P WCI is multi-currency.
To preserve the tradability of the Index, the S&P WCI limits eligible commodity contracts to those that are the subject of active, liquid futures markets. Also, to replicate actual commodity market performance, the S&P WCI includes a “rolling” procedure designed to replicate the rolling of actual positions in the designated contracts.
The S&P WCI is calculated in U.S. dollars. While the underlying futures contracts prices are traded in local currencies, using WM/Reuters’ spot exchange rates, these local currencies are converted to U.S. Dollars. There is no limit on the number of contracts that may be included in the S&P WCI, as long as they satisfy the eligibility criteria.
Source: ETFWorld – Standard & Poor’s
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