NEW YORK, U.S. — Bloomberg announced yesterday the 2021 target weights and composition for the Bloomberg Commodity Index (“BCOM”). Launched in 1998, with historical information dating back to 1960, BCOM is a widely tracked benchmark for the commodities market. Composed of 23 exchange-traded contracts on physical commodities, the 2021 target weights become effective January 2021.
There will be no commodity additions or deletions to BCOM in 2021.
Since inception of the benchmark, Precious Metals and Gold target weights have never been higher. The Precious Metals group increased from 1.6% to 19%, of which Gold increased to 14.6%. Industrial Metals dipped below 16% for the first time in the benchmark’s history. Driven by volume within the Energy group, the spread between WTI and Brent Crude Oil’s weight continued to widen, to the highest level since 2014.
Overall, Bloomberg Commodity Index target weights will see increases in Energy, Grains, Softs, and Precious Metals, and decreases with Industrial Metals and Livestock. Target weights of all BCOM components for 2021, as well as their comparative weights in 2020, are listed below:
Target weights are determined in accordance with the rules described in the BCOM methodology. The index rules account for liquidity and production data in a 2:1 ratio and subject to the following requirements for diversification and minimum weights:
- No group may constitute over 33% weight;
- No single commodity, together with its derivatives, may constitute over 25% weight;
- No single commodity may constitute over 15% weight.
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