The
RICI attempts to balance consumption patterns worlwide.One popular
index has 19% in precious metals with only 6% in hydrocarbons-
the same weighting it gives to orange juice. Another recently
has as much as 63% in hydrocarbons, with only 37% for everything
else the world consumes.The RICI is designed to offer stability
-partly because it is broadly based and consistent in composition.
Another popular index is changed dramatically every year which
does little for continuity.
The weightings of the RICI were selected based on Mr Roger's
perception of the relative importance of those raw materials.The
fixed weights of each commodity selected for inclusion in the
RICI are determined in the December preceding each year. These
weights are then applied to the price changes in the nearby
futures or forward contract each month. 44% of the RICI is energy
orientated. Approximately 7% of the weighted index is exposed
to foreign exchange volatility, spread among Canadian dollar,Australian
dollar, Japanese yen and British pound.
The RICI Index is composed of the following raw materials :
Crude Oil, Wheat, Corn, Aluminium, Copper, Heating Oil,
Unleaded Gas,
Natural Gas, Cotton, Soybeans, Gold, Live Cattle, Coffee, Zinc,
Silver,
Lead, Rice, Platinium, Soybean Oil/Palm Oil, Live Hogs, Sugar,
Azuki Beans, Cocoa, Nickel, Tin, Wool, Rubber, Lumber, Barley,
Canola,
Orange Juice, Oats, Palladium, Silk, Flaxseed. |
