Dow Jones Aig Commodity Index

Posted in Finance, Accounting and Economics Terms, Total Reads: 256
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Definition: Dow Jones Aig Commodity Index

It is a rolling commodities index composed of futures contracts of 19 physical commodities traded on U.S. stock exchanges. This index is used as a liquid and diversified benchmark and even to compare with other commodities' asset class.


DJ-AIGCI is a diversified commodities index. The weightings in the index are based on the economic significance of individual commodity and maintaining low volatility along with sufficient liquidity.

 

This index is different from other commodities indexes like Goldman Sachs Commodity Index because it Employs both liquidity and dollar-adjusted production data to evaluate its’ individual component weightings and even allows for varying component weightings. But it does maintains restrictions like maximum and minimum component weightages to ensure adequate diversification.

 

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