Nasdaq (NasdaqGS: NDAQ - News) and Axioma have created a new group of indices that give investors exposure to the spot prices of commodities. These indices will be a welcome addition because they bypass investment in futures contracts.
“These indexes deliver exposure to commodity prices by using equities whose share prices track prices for gold, oil or a basket of agriculture products,” John Jacobs, executive vice president Nasdaq Global Index Group, said. “This is a valuable new tool for portfolio managers and other market participants who track commodities, particularly in this environment of increasingly volatile and complex markets,” Jacobs said. [List of Top Commodity ETFs]
According to the Axioma fact sheet, the goal of the indices is to achieve a beta of 1 to the spot price movements of a commodity through regression analysis on an equity scale. [ETF Chart of the Day: Commodities]
Portfolio managers will be able to match their returns closer to the actual performance of share prices for gold, oil or agriculture products, according to the press release. The three new indices are:
- The NASDAQ Axioma Equity-Commodity Oil Index
- The NASDAQ Axioma Equity-Commodity Gold Index
- The NASDAQ Axioma Equity-Commodity Agriculture Index
These indices are unique in structure and methodology. They are re-balanced monthly, information on holdings are available on a daily basis and Axioma uses a special construction and analysis tool that gives convenient access to commodity exposure, Nasdaq said. [Using ETFs to Build a Diversified Portfolio]
Tisha Guerrero contributed to this article.