Each of the new sub-indexes, consisting of a single commodity, is constructed according to the rules of the DJ-AIGCI. There is one sub-index for each of the 19 commodities currently included in the DJ-AIGCI plus a sub-index for cocoa, which was an Index component until 2005. The 19 commodities currently included in the DJ-AIGCI are aluminum, coffee, copper, corn, cotton, crude oil, gold, heating oil, lean hogs, live cattle, natural gas, nickel, silver, soybeans, soybean oil, sugar, unleaded gasoline, wheat, and zinc. Total return versions of each of the new sub-indexes are available as well. The new sub-indexes join 25 other DJ-AIGCI-related indexes and sub-indexes already calculated daily by Dow Jones Indexes and AIG Financial Products Corp. The expansion of the Index family responds to the rapid growth of interest in commodities as an asset class.
Investors are demanding increasingly sophisticated tools to manage their commodity investment as they develop specialized views on specific commodities. These new sub-indexes provide investors with a benchmark for those markets. For example, those investors who invest in sugar or corn in light of the increased use of these commodities in ethanol production can now use the Dow Jones-AIG Sugar Sub-IndexSM and the Dow Jones-AIG Corn Sub-IndexSM as a benchmark for those investments. Investors are also increasingly sensitive to the details of index construction as they can impact commodity index returns, and the new sub-indexes are constructed according to the rules of the DJ-AIGCI.
"The rapid growth of this asset class in recent years has been nothing short of remarkable,” said Michael A. Petronella, president of Dow Jones Indexes/Ventures. “As investor demand for greater flexibility to manage commodity index-based investment has grown, we have responded with new and efficient vehicles to investors seeking tools to measure their exposure to individual commodity futures markets."
"With approximately $24 billion in assets tracking the Dow Jones-AIG Commodity Index on a global basis, we think it’s important that commodity investors also have an increased capability to customize their exposure to specific commodities using a benchmark with the credibility of the DJ-AIGCI,” said Joseph Cassano, president of AIG-FP. “While broad commodity indexes remain the best way for many investors to access the asset class from a strategic perspective, other investors may seek to adjust exposure to certain commodities on a more tactical basis."
The Dow Jones-AIG Commodity Index, a diversified and highly liquid benchmark for the commodities markets, is composed of futures contracts on physical commodities and was introduced in 1998.
