With one exception, the additional data was calculated using the same methodology as employed for the creation of the SPCI. The new history does not use commercial open interest for data prior to 1986 since the Commodity Futures Trading Commission does not differentiate between commercial and speculative open interest before that time.
"The calculation of historical data on the SPCI will be particularly valuable for analysts conducting asset-liability studies for institutional investors," said Ryan Carrier, Director of Global Business Development of Standard & Poor's Index Services. "In addition, the consistent application of our methodology to calculate this history makes the index an excellent benchmark for investors tracking commodity-based investments."
Standard & Poor's has noticed an increase in investor interest in this asset class and recognizes that current market conditions play to commodities' strengths. "Investors are once again looking at commodities for their diversifying characteristics, their negative correlation to stocks and bonds and their ability to provide a hedge against inflation," said Mr. Carrier.
The SPCI was introduced in July 2001 as a new generation commodity index designed to address investor concerns of double counting and volatility normally associated with traditional commodity indices. A key feature of the SPCI is that it is geometrically calculated. Unlike arithmetically calculated indices, this methodology maintains its original dollar weighting at all times, eliminating the exposure associated with any particular component or sector from dominating the index during times of violent price fluctuations. The SPCI tracks 17 commodities in six sectors including grains, meat and livestock, metals, softs (coffee, sugar, cocoa), fibers, and energy. The prices used to calculate the index are the real-time prices of the relevant futures contracts traded on the commodities futures markets in New York and Chicago.
Futures and options indexed to the SPCI trade on the New York Board of Trade (NYBOT). End-of-day index values and index history are available through both the S&P Index Services website at www.spglobal.com/indexmaincommodity.html and NYBOT's Website at www.nybot.com.
The SPCI is calculated every 15 seconds and is available through traditional real-time quote vendors via the NYBOT; the ticker symbol is 'I'. As part of the NYBOT's initial promotion of the index to investors, there is no charge for receiving quotes on the SPCI.
Standard & Poor's, a division of The McGraw-Hill Companies (MHP: NYSE), is a leading global provider of financial information and investment analysis. Included among its product lines are corporate financial information, corporate valuations and value analysis, analytical services, and credit ratings on more than 220,000 securities and funds worldwide. With more than 5,000 employees located in 18 countries, Standard & Poor's is an integral part of the world's financial architecture. Additional information is available at www.standardandpoors.com .
