Commodities are hot right now. Very hot. Everybody's watching the performance of futures contracts and the indexes tracking those contracts. However, commodities do come from somewhere. Copper, for example, does not spring from the earth in shiny little coils, and soybeans do not grow in the wild in neatly formed rows.

There's planting, extracting, refining and hundreds of other processes that must be implemented before commodities ever reach the end consumer. But we're not hearing so much about the companies that actually produce the commodities we use. That might be about to change.

Commodities expert (and the creator of his own family of widely followed commodities indexes) Jim Rogers and Van Eck Global have teamed up to create what appears to be the first comprehensive global index of hard assets producers. There already are sector indexes, of course, that cover commodities producers in a particular area - such as the stand-alone Amex Gold Miners Index or the industry-specific subindexes that can be found in most broad-based global index families. There is also the S&P North American Natural Resources Sector Index, which cuts across different commodities-related sectors but isn't global in scope. Before now, there does not appear to have existed a wide-reaching global equity index that covered commodities producers across a range of sectors - let alone an entire index series.

Find A Gap And Fill It

"I don't know of any [other similar indexes]. That was one reason I wanted to do it," said Rogers. "When there's a gap, particularly in something you think people need to know about or participate in, somebody's got to do it - so we did it."

The Rogers Van Eck Hard Assets Producer Index family includes a headline index of more than 300 companies, in addition to a composite index that contains nearly 850 stocks. The series also includes an extra-liquid index with just 50 stocks and three sector indexes covering agriculture, energy and metals. In all, the family includes the stocks of companies domiciled in 39 different countries, and the companies in the headline index have a combined market capitalization that represents 15% of the global total.

There's a lot that's interesting about the index family. For one thing, it isn't limited to producers per se - it also includes companies that provide vital products and services to those producers. It also isn't limited to producers of commodities that are featured in the major commodity indexes or even the ones that have futures contracts based on them - the index family's scope includes an "alternatives" category that covers companies such as water utilities and companies involved in the production of energy from alternative resources like the sun or the wind. The Alternatives category encompasses companies involved in alternative energy resources, energy efficiency, water utilities and water infrastructure and technology; the sector represents about 4% of the headline index.

"As the world changes, we are prepared for the changes," Rogers said of the decision to include the Alternatives category, pointing out that equity shares are the only way for investors to access those areas of the commodities markets since there is no futures market.

Previous Page

1  |  2

| Full Article  |Next Page