Bloomberg Introduces New Bloomberg Commodity Carbon Tilted Index

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May 31, 2023, 08:30 ET

NEW YORK, May 31, 2023 /PRNewswire/ -- Bloomberg today announced a new benchmark in its commodities index offering with the launch of the Bloomberg Commodity (BCOM) Carbon Tilted Index, designed to provide a reduced carbon profile while maintaining exposure to a diversified universe of physical commodities.

The index is based on a novel approach to measuring carbon emissions, resulting in overweighting commodities with a lower carbon footprint while minimizing tracking error to Bloomberg's flagship BCOM parent index. The approach was developed through collaboration between Bloomberg's index product and quantitative research teams in order to find a strong foundation for the sector tilting concept underpinning the construction of this index. This dual mandate of underweighting the most greenhouse gas emissions (GHG) intensive commodities while minimizing tracking error is achieved by incorporating data-driven assessments of GHG emissions across the relevant parts of the life cycle of the commodity markets represented in the index, while still adhering to a composition that preserves BCOM sector weights.

"The BCOM Carbon Tilted Index is designed with investors' complex needs in mind. There is a growing want to support the transition to a low-carbon economy while remaining aligned with their investment goals across all asset-classes," said Allison Stone, Head of Multi-Asset Product, Bloomberg Index Services Limited. "Utilizing a foundation of Bloomberg carbon research, this index has been constructed using an innovative methodology that speaks to priorities of sustainability and diversification, while still providing the liquidity that commodities investors commonly seek. We are proud to continue to deliver new indices that meet this challenge and can help take the market forward."

The new index is the latest extension of the Bloomberg Commodity Index, which was launched in 1998 and introduced to the market the first explicit focus on market liquidity and capping mechanism constraining individual sectors and preserving a balance over time. BCOM provides broad-based exposure to commodities, and no single commodity or commodity sector dominates the index. Rather than being driven by micro-economic events affecting one commodity market or sector, the diversified commodity exposure of BCOM potentially reduces volatility in comparison with non-diversified commodity investments.

Bloomberg Terminal clients can access the index using ticker BCOMCA Index <GO> and relevant fact sheets, methodology and research for the new index is available on the BCOM Publications page.

Bloomberg provides an independent, transparent approach to indexing for customers across the globe. Bloomberg clients can access available indices on the Bloomberg Terminal and all research and methodology for the indices is available at Bloombergindices.com.

About Bloomberg Index Services Limited
Bloomberg's index team has a proven track record in creating industry leading and bespoke indices across asset classes, including best in class fixed income and commodity indices. Bloomberg Index Services Limited (BISL) takes an innovative approach to delivering strategic benchmarks that help market participants address their evolving needs. As an integral part of Bloomberg, BISL has access to a comprehensive range of trusted data and reliable technology for calculations, analytics and workflow automation, along with distribution capabilities that can help amplify the visibility of our customers' products.

About Bloomberg
Bloomberg is a global leader in business and financial information, delivering trusted data, news, and insights that bring transparency, efficiency, and fairness to markets. The company helps connect influential communities across the global financial ecosystem via reliable technology solutions that enable our customers to make more informed decisions and foster better collaboration. For more information, visit Bloomberg.com/company or request a demo.

SOURCE Bloomberg