Lehman Brothers to launch commodity index

Lehman Brothers will launch its Lehman Brothers Commodity Index (LBCI) on July 1 to track the performance of 20 commodities futures contracts across the energy, metals, agricultural and livestock markets.

The breakdown of the components of the index as of June 23 was 52.9% in energy, 27.2% metals, 17.4% agriculture and 2.5% livestock. The benchmark will be rules-based and rely on futures trading volumes as the major criteria for selection. Weighting of the components will be reset annually. Individual commodity indexes will also be published.

The US bank aims to roll out more versions of the LBCI to include non-US, exchange-listed commodities traded in foreign currencies.

“It is clear the commodities market has evolved to the point where we believe there is demand for both global and regionalised versions of the LBCI,” said Neil Wardley, a senior vice-president at Lehman Brothers’ index strategy group.