Commodity Index


DEFINITION of 'Commodity Index'

An index that tracks a basket of commodities to measure their performance. These indexes are often traded on exchanges, allowing investors to gain easier access to commodities without having to enter the futures market. The value of these indexes fluctuates based on their underlying commodities, and this value can be traded on an exchange in much the same way as stock index futures.

BREAKING DOWN 'Commodity Index'

There is a wide range of indexes on the market, each of them varying by their components. The Reuters/Jefferies CRB Index, which is traded on the NYBOT, comprises 19 different types of commodities ranging from aluminum to wheat. They also vary in the way they are weighted; some indexes, for instance, are equally weighted and others have a predetermined, fixed weighting scheme.

  1. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  2. Chicago Board Of Trade - CBOT

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  3. Futures

    A financial contract obligating the buyer to purchase an asset ...
  4. Goldman Sachs Commodity Index - ...

    A composite index of commodity sector returns which represents ...
  5. Commodity Futures Trading Commission ...

    An independent U.S. federal agency established by the Commodity ...
  6. New York Board Of Trade - NYBOT

    A commodities exchange in New York that trades futures and options ...
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  1. Do hedge funds and mutual funds invest in commodities in high inflation environments?

    Hedge funds and mutual funds are very different types of investment vehicles.The contents of a hedge fund are determined ... Read Full Answer >>
  2. Can hedge funds trade penny stocks?

    Hedge funds can trade penny stocks. In fact, hedge funds can trade in just about any type of security, including medium- ... Read Full Answer >>
  3. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  4. Can hedge funds outperform the market?

    Generating returns that exceed those provided by the broader market is the goal of nearly every investor. However, the methods ... Read Full Answer >>
  5. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  6. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>

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