Bloomberg Announced Target Weights and Composition for BCOM
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Bloomberg Announced Target Weights and Composition for BCOM

Bloomberg Announced Target Weights and Composition for BCOM

On October 29, 2020, Bloomberg announced 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 the 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, BCOM 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:


Group

Commodity

Ticker

2021 Target Weight

2020 Target Weight

Energy

WTI Crude Oil

CL

8.1448320%

7.9906450%

Natural Gas

NG

8.0720060%

7.9601350%

Brent Crude Oil

CO

6.8551680%

7.0093550%

Low Sulphur Gas Oil

QS

2.6415190%

2.5990850%

RBOB Gasoline

XB

2.1791840%

2.2583580%

ULS Diesel

HO

2.0820140%

2.1137150%



29.97%

29.93%

Grains

Corn

C

5.5866490%

5.8331390%

Soybeans

S

5.8174090%

5.6367600%

Soybean Meal

SM

3.5987640%

3.2950770%

Wheat

W

2.8850050%

3.0422510%

Soybean Oil

BO

3.1955900%

2.8985800%

HRW Wheat

KW

1.5713880%

1.4859640%



22.65%

22.19%

Industrial Metals

Copper

HG

5.3937680%

6.9605820%

Aluminum

LA

4.2083970%

4.3266510%

Zinc

LX

3.2468830%

3.4262380%

Nickel

LN

2.7139540%

2.7507970%



15.56%

17.46%

Precious Metals

Gold

GC

14.6459560%

13.6224130%

Silver

SI

4.3539140%

3.7785780%



19.00%

17.40%

Softs

Sugar

SB

2.9870850%

3.0098940%

Coffee

KC

2.7366190%

2.7121520%

Cotton

CT

1.5110980%

1.4915570%



7.23%

7.21%

Livestock

Live Cattle

LC

3.8464030%

4.0201190%

Lean Hogs

LH

1.7263950%

1.7779520%



5.57%

5.80%


Target weights are determined following 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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DISCLAIMER: The views expressed in this insight piece are those of the author and do not necessarily reflect the official policy or position of IndraStra Global.