S&P offers commodities and natural resources

Index provider Standard & Poor’s has launched two new indexes: the S&P Global Natural Resources and PMI Commodities and Resources indexes, which are designed to provide exposure to the commodities and natural resources sectors.

The Global Natural Resources index provides exposure across the primary commodity sectors of energy, agribusiness and metals and mining. Each of these sectors has two clusters – energy (oil, coal and gas), agribusiness (agriculture & livestock) and metals and mining (precious and industrial). The index offers coverage of the 60 largest companies across these six clusters, and is designed primarily for use within structured products and ETFs. The index uses a modified cap weighting at the constituent level subject to stock level constraints (10% cap per stock).

A minimum market capitalisation of US$1 billion and a minimum six-month average daily value traded of $10 million is required. The three sectors, six clusters and 10 stocks per cluster are not capped, so the index weighting is driven from the bottom up. The PMI Commodities and Resources index offers a broader coverage of larger capitalised stocks from commodities and resources (energy, agribusiness and metals & mining). Approximately 160 stocks are suitable for benchmarking for performance measurement, data for research, or passive management, including funds and ETFs.

The index measures the performance of constituents that fall into three different natural resources buckets: energy, materials and agriculture. Each bucket is capped at 33.33% to ensure that one bucket will not dominate the index. The index is a subset of the S&P/Citigroup BMI Global Equity Indexes.