BNP Paribas lengthens commodity exposure with new index

BNP Paribas has launched a new commodity index designed to give investors exposure beyond short-term futures contracts. The Commodity Market Representative Index (CMRI) incorporates different maturity futures contracts for a basket of twenty-five different commodities.

In contrast to traditional commodity indexes, the CMRI calculates market interest and liquidity into the value of each commodity, known as “open interests,” which is similar to the principle of market capitalisation used in constructing equity indexes.

The entire basket of commodities, which includes energy, metals and agricultural products, averages 4.64 futures contracts per constituent, with 116 contracts in total. The bank aims to diversify exposure and improve returns as a result. BNP