STAMFORD, Conn., Nov. 4, 2010 /PRNewswire/ -- SummerHaven Index Management, LLC, announces the launch of the SummerHaven Copper Index (SCI), the first dynamic copper price index designed for commodity investors.
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The SCI seeks to minimize contango and maximize backwardation through selection of copper futures contracts each month. The SCI selects COMEX High Grade Copper futures contracts with maturities of 18-months or less and maintains positions in liquid portions of the copper futures curve.
SummerHaven developed the SCI and adds this new copper benchmark to its family of dynamic commodity indexes: the SummerHaven Dynamic Commodity Index (SDCI), the SummerHaven Dynamic Metals Index (SDMI) and the SummerHaven Dynamic Agriculture Index (SDAI). The SDCI is calculated and published by Bloomberg and is the investment benchmark for the United States Commodity Index Fund (NYSE Arca ticker "USCI"), an exchange traded commodity fund.
SummerHaven Partner and index researcher Adam Dunsby, PhD, commented, "We believe based on our research that a properly constructed single-commodity index, one that dynamically adjusts its weightings along the investable futures curve, can produce results over time that exceed the results from a traditional static index while displaying the same, or less, volatility. Such results should be of interest to investors."
The First Dynamic Copper Index
This new copper futures index is designed as a benchmark for investors seeking attractive risk-adjusted copper returns. Traditional commodity indexes tend to weight 100% to the nearest-to-maturity contract without consideration of changing market dynamics. Through use of fundamental signals about the underlying physical copper market, the SCI weights its composition to closer-to-maturity contracts in backwardated markets and shifts to longer duration contracts when markets are in contango.
Kurt J. Nelson, Partner at SummerHaven, states "Investor interest in copper has increased recently, and SummerHaven is excited to offer this new copper index. Physical copper storage costs have averaged more than 3% per year over the last decade, and copper futures investors can at least partially avoid these costs when the futures market is backwardated. In addition, physical copper investors don't earn interest on their physical investment, and the SCI includes full cash collateral return through the 90-day U.S. Treasury Bill rate."
About SummerHaven Index Management
Headquartered in Stamford, CT, SummerHaven Index Management is focused on creating innovative commodity indices. The firm is led by a seasoned management team with over 50 years of collective financial markets experience with commodity futures, capital markets, investment management, and exchange traded products. The first commodity index created by SummerHaven, the SummerHaven Dynamic Commodity Index, is published daily by Bloomberg under the ticker SDCITR.
Inquiries: |
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Kurt J. Nelson |
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SummerHaven Index Management, LLC |
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+1 203 352 2702 |
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www.summerhavenindex.com |
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Disclosure
Bloomberg is a trademark of Bloomberg L.P.
United States Commodity Funds and United States Commodity Index Fund are trademarks of United States Commodity Funds LLC.
SOURCE SummerHaven Index Management, LLC
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