The launch of the contract, which will be cash settled, will allow a broad sector of market participants to hedge commodity and inflation exposure and achieve portfolio diversification. The DowSMJones-AIG Commodity Index is designed to be a liquid and diversified benchmark for commodities as an asset class. Potential benefits of the DJ-AIGCI include positive returns over time and negative correlation with equities and bonds. In addition, academic research has demonstrated that investments in commodities can provide unique portfolio diversification benefits.
CBOT® Chairman Nickolas J. Neubauer said, "These contracts combine the indexing experience of DowSMJones Indexes and the commodities expertise of AIG Trading with the unmatched liquidity and market integrity of the CBOT® markets. These contracts will become the preeminent commodity index futures product, and will promote trading opportunities for institutional investors and our members. This announcement reflects the commitment of CBOT® President and CEO David Vitale and his new management team to introduce new products in a timely and efficient manner, and our ability to recognize market trends and partner effectively."
AIG Chairman M. R. Greenberg said, "Product innovation is critical to AIG's growth strategy in all sectors of our business. Working with the CBOT® and DowSMJones Indexes in this product development effort reinforces AIG Trading Group's expertise in creating innovative risk management products. This new program will offer market participants the ability to hedge commodity and inflation exposures in a highly liquid and tradable format to help achieve portfolio diversification."
Peter R. Kann, Chairman and CEO of DowSMJones & Company, said, "The DowSMJones-AIG Commodity Index opens the door of opportunity for investors to this unique asset class. The index methodology weights 20 commodities both by investor interest-as measured by trading volume in futures contracts of the index's component commodities-and by production. The result is an index that is not skewed toward one commodity and yet clearly distinguishes between major and minor commodities. Now investors will have at the CBOT® an important portfolio tool that reflects commodities markets as they really impact economies worldwide."
The 20 Commodities currently in the DJ-AIGCISM are:
Aluminum, Cattle, Cocoa, Coffee, Copper, Corn, Cotton, Crude Oil, Gold, Heating Oil, Hogs, Natural Gas Nickel, Silver, Soybeans, Soybean Oil, Sugar, Unleaded Gas, Wheat, Zinc.
The DJ-AIGCI appears daily on pages A1 and C1 of The Wall Street Journal and can be accessed on Reuters Page AIGCI1.
For further information on DJ-AIGCI futures, contact the following:
- CBOT®-David Lehman, 312-347-3848 or dlehman@cbot.com
- AIG Trading Group Inc.-Adam De Chiara or Dan Raab, 203-861-3438 or djaigci@aigi.com.
- DowSMJones Indexes-Sybille Reitz, 212-416-2418 or sybille.reitz@dowjones.com.
- AIG Trading Group Inc.-Adam De Chiara or Dan Raab, 203-861-3438 or djaigci@aigi.com.
Providing a diverse mix of financial and commodity futures and options-on-futures products, the Chicago Board of Trade advances into the 21st Century on the strength of over 150 years of member-trader expertise, unparalleled liquidity, and market integrity. Via open outcry and screen-based trading, the CBOT® provides premier customer service to risk managers and investors worldwide. Established in 1848, the CBOT® was launched originally for agricultural producers to achieve price protection. Today, CBOT® members trade more than 60 different products, including futures and options-on-futures on U.S. Treasury bonds and notes, the DowSMJones Industrial Average and other DowSMJones indices, Agency debt, a Municipal Bond index, and Mortgages. In August 2000, the CBOT® was reincorporated in Delaware as a Delaware not-for-profit nonstock corporation.
About AIG Trading Group Inc.
AIG Trading Group Inc., through its subsidiaries, engages in trading and market making in foreign exchange, emerging market debt, precious and base metals, energy products and commodity indices.
AIG Trading provides highly personalized customer service and creates innovative risk management products for multinational corporations, financial institutions, commercial producers and users, institutional investors and sovereign entities. AIG Trading's breadth of services include currency and commodities prime brokerage, client-tailored back-office support, and access to e-commerce trading portals and insightful political-economic research from leading figures in the financial services industry. AIG Trading operates through a worldwide network of offices including its Greenwich, Connecticut headquarters, London, Paris, Singapore, and Toronto.
bout American International Group, Inc.
AIG is the leading U.S.-based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in the United States. Its member companies write a wide range of commercial, personal and life insurance products through a variety of distribution channels in approximately 130 countries and jurisdictions throughout the world. AIG's global businesses also include financial services and asset management, including aircraft leasing, financial products, trading and market making, consumer finance, institutional, retail and direct investment fund asset management, real estate investment management, and retirement savings products. American International Group, Inc.'s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.
About DowSMJones Indexes
DowSMJones Indexes is a premier global provider of investable indexes, including the DowSMJones Averages, the DowSMJones Global Titans 50, the DowSMJones Asian Titans 50, the DowSMJones Sector Titans, the DowSMJones Global Indexes, the Pan-European DowSMJones STOXX Indexes, the DowSMJones U.K. Titans 50, the DowSMJones Canada 40, the DowSMJones Japan 100, the DowSMJones Total Market Index Series, the DowSMJones REIT Indexes, the DowSMJones-AIG Commodity Index, the DowSMJones Islamic Market Indexes, the DowSMJones Internet Indexes, and the DowSMJones Sustainability Group Indexes. DowSMJones Indexes is part of DowSMJones & Company, which publishes the world's most vital business and financial news and information.
Disclaimer
"DowSMJones" and "AIG" are service marks of DowSMJones & Company, Inc. and American International Group, Inc. ("AIG"), as the case may be, and have been licensed for use for certain purposes. DowSMJones does not sponsor, promote, or sell any product based on the DowSMJones-AIG Commodity Index and none of DowSMJones, AIG or AIG Trading Group Inc. and their respective affiliates make any representation herein regarding the advisability of investing in any product based on the Index.
