SummerHaven Index Management Announces Launch of the SummerHaven Dynamic Metals Index and the SummerHaven Dynamic Agriculture Index

STAMFORD, Conn., Sept. 23 /PRNewswire/ -- SummerHaven Index Management, LLC announces the launch of the first active commodity sector indexes: the SummerHaven Dynamic Metals Index ("SDMI") and the SummerHaven Dynamic Agriculture Index ("SDAI"). These indexes adjust commodity weightings each month through a methodology that increases weights in commodities which exhibit signs of having low levels of physical inventory, and to decrease weights for commodities which exhibit signs of having high levels of physical inventory. Recent academic research has shown that commodities with low inventories tend to outperform commodities with high inventories over time.

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The SDMI and SDAI are composed of commodity futures for which active and liquid contracts are traded on futures exchanges in London, the United States, and Canada.  The commodities are denominated in U.S. or Canadian dollars.

The SDMI tracks the performance of a diversified portfolio of 10 metals from the Industrial and Precious Metals sectors:  aluminum, copper, nickel, zinc, lead, tin, platinum, palladium, silver and gold.

The SDAI tracks the performance of a diversified portfolio of 14 agricultural commodities from the Grains, Softs and Livestock sectors: soybeans, soybean oil, soybean meal, canola oil, corn, wheat (Chicago Board of Trade – soft red winter), wheat (Kansas City Board of Trade – hard red winter), cotton, sugar, cocoa, coffee, live cattle, feeder cattle and lean hogs.

SummerHaven Partner and index researcher Adam Dunsby, PhD, commented, "We believe based on our research that a properly constructed commodity sector index, one that dynamically adjusts the weightings of the various commodities, can produce results over time that exceed the results from a traditional static index while displaying the same, or less, volatility. Such results should be of interest to investors."

This announcement follows last year's launch of the SummerHaven Dynamic Commodity Index ("SDCI"), which was the first active commodity futures benchmark for commodity investors. The SDCI is calculated and published by Bloomberg. The SDCI was subsequently licensed to United States Commodity Funds LLC and serves as a benchmark for the United States Commodity Index Fund, an exchange traded commodity fund which trades on the NYSE Arca under the ticker "USCI."

The First Active Sector Indexes for Commodities

These new commodity sector indexes are designed as benchmarks for investors seeking attractive risk-adjusted sector returns. The baseline weightings for commodities in each sector seek to reflect their relative importance in terms of market size and liquidity. Each month the sector indexes overweight or underweight constituent commodity futures contracts using price-based signals including backwardation and relative 12-month price change of nearest-to-maturity contracts. Diversification is maintained by including all commodities in the indexes each month, with either an overweight or underweight participation from the baseline weightings.

Professor K. Geert Rouwenhorst of the Yale School of Management and Partner at SummerHaven commented, "Investors continue to look for more intelligent ways to gain exposure to commodities. These new sector indexes provide a disciplined approach towards incorporating fundamental signals into sector index construction. Their construction attempts to strike a balance between diversified sector exposure and active commodities management."

About SummerHaven Index Management

Headquartered in Stamford, CT, SummerHaven Index Management is focused on creating innovative commodity indexes. The firm is led by a seasoned management team with over 50 years of collective financial markets experience with commodity futures, capital markets, investment management, and exchange traded products. SummerHaven Index Management, LLC is the owner, publisher and custodian of the SDMI and the SDAI.

Disclosure

Bloomberg is a trademark of Bloomberg L.P.

United States Commodity Funds and United States Commodity Index Fund are trademarks of United States Commodity Funds LLC.

SOURCE SummerHaven Index Management, LLC