Standard & Poor’s has announced the launch of two new indices aimed at providing investors with benchmark and investible exposure to the commodities and natural resources sectors.
Standard & Poor’s has announced the launch of two new indices aimed at providing investors with benchmark and investible exposure to the commodities and natural resources sectors.
The S&P Global Natural Resources Index is designed to provide diversified, highly liquid and investible exposure across the primary commodity sectors of energy, agribusiness, and metals and mining.
Each sector has two clusters, consisting of oil and coal and gas, agriculture and livestock, and precious and industrial metals respectively. The index offers coverage of the 60 largest companies across these six clusters, and is designed primarily for providers of structured products and exchange-traded funds.
The S&P PMI Commodities and Resources Index aims to provide a broader coverage of larger capitalised stocks from the energy, agribusiness, and metals and mining sectors, with around 160 stocks suitable for benchmarking for performance measurement, data for research, or passive management, including funds and ETFs.
‘The launch of these indices reinforces our leadership position in commodities and extends our offering into natural resources,’ says Steven Goldin, vice-president of Standard & Poor’s Index Services.
‘We already have the S&P GSCI, the premier commodities index based on futures contracts. With these new indices, we have broadened our coverage of these closely-linked sectors by providing both investible and benchmark equity exposure.’
The Global Natural Resources Index is part of S&P’s family of global thematic indices. It uses a modified cap weighting at the constituent level subject to stock level constraints (10 per cent cap per stock). To ensure investibility, a minimum market capitalisation of USD1bn and a minimum six-month average daily value traded of USD10m is required. The three sectors, six clusters and 10 stocks per cluster are not capped, so the index weighting is bottom-up driven.
The PMI Commodity and Resources Index measures the performance of constituents that fall into the three natural resources buckets of energy, materials and agriculture, each capped at 33.33 per cent. The index is a subset of the S&P/Citigroup BMI Global Equity Indices.
Returns over the 12 months to April 30 were 35.27 per cent for the S&P Global Natural Resources Index and 51.92 per cent for the S&P PMI Commodity and Resources Index.
Standard & Poor’s Index Services maintains a wide variety of investible and benchmark indices including the S&P500, an index with USD1.32trn invested and USD4.91trn benchmarked, and the S&P Global 1200, a composite index comprised of seven regional and country headline indices.
