ABN Amro has launched new commodity indexes, which could lead to some new commodity exchange traded funds (ETFs). The RICI indexes were developed with Jim Rogers and are enhanced commodity indexes, which seeks to find value in treating each commodity differently. These indexes will optimize Rogers’ existing indexes, achieving an attractive risk/reward profile through a custom contract mechanism and rolling mechanism.

HedgeWeek reports this mechanism will mitigate the negative roll yield problem experienced by investors when the market moves into contango. The positive roll yield will be salvaged when the market is in backwardation.

The indexes are:

  • RICI Enhanced Global Index
  • 3 sector indexes: RICI Enhanced Energy, RICI Enhanced Agriculture, RICI Enhanced Metals
  • 37 individual commodity indexes

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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