NEW YORK — Bloomberg announced today the 2018 target weights and composition for the Bloomberg Commodity Index (“BCOM”). Launched in 1998, BCOM is a highly liquid and diversified benchmark for the commodities market.
No new commodities will be added or removed as a result of the annual reconstitution. The 2018 target weights will be effective January 2018.
Energy will remain the largest group in BCOM in 2018, despite reaching its lowest weight in 17 years at 30.43%. The index will see marginal weight increases in the Industrial Metals, Precious Metals, Softs and Livestock groups.
Gold will remain the highest weighted constituent, increasing in weight to 12%. The largest commodity weight drop will be in corn, decreasing over 1.2%.
Target weights of all BCOM components for 2018, as well as their comparative weights in 2017, are listed below:
Target weights are determined in accordance with the rules described in the BCOM methodology. The index rules account for liquidity and production data in a 2:1 ratio and are subject to the following requirements for diversification and minimum weightings:
- No single commodity (e.g., Wheat) may constitute more than 15% of BCOM
- No single commodity, together with its derivatives, may constitute more than 25% of BCOM (e.g., WTI Crude Oil and Brent Crude Oil, together with ULS diesel and RBOB Gas)
- No group may constitute more than 33% of BCOM (e.g., Precious Metals)
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