Caixin Insight, Gresham Launch Commodity Futures Index

Caixin Insight, a sister company of Caixin Media, and U.S. asset manager Gresham Investment Management LLC have launched an index that aims to become a benchmark for China’s commodity futures market.

The China Commodity Index (CCI) gauges price changes in 32 contracts of 28 commodities traded on the country’s three futures exchanges in Shanghai, the northeastern city of Dalian and Central China’s Zhengzhou, the two companies said in a joint statement on Thursday.

“The China Commodity Index is intended as a benchmark for diversified long-only investment in Chinese exchange-traded tangible commodity futures, which will provide investors, both foreign and domestic, with an effective, scientific tool to track and invest in Chinese commodity futures,” it said.

To be included into the index, commodities whose futures must have been actively traded for at least three years with a total annual value of transactions that exceeds 170 billion yuan ($26.7 billion).

The index covers five groups of commodities: energy, agricultural products, food and fibers, industrial metals, and precious metals.

To ensure the indicator is highly diversified, the weight of each commodity in the index is capped at 10%, while that of each group can be no more than 35%.

In April, the CCI closed at 173.51, up from 169.46 a month ago, with hot-rolled steel coil, rebar and thermal coal leading the increase, according to the first official monthly report about the index, which was released on Wednesday.

Caixin Insight is a provider of Chinese business and financial data, macroeconomic research and consulting services.

Gresham Investment Management, based in New York, specializes in investing in commodity futures. It managed more than $7.5 billion for its clients as of March.

Contact reporter Fran Wang (fangwang@caixin.com)