1.1 THE RICI®
The Rogers International Commodity Index® (“RICI®”) is a composite, USD based, total return index, designed by James B. Rogers, Jr. in the late 1990s.
The index was designed to meet the need for consistent investing in a broad-based international vehicle; it represents the value of a basket of commodities consumed in the global economy, ranging from agricultural to energy to metals products. The value of this basket is tracked via futures contracts on exchange-traded physical commodities, comprised of 38 commodities futures contracts, quoted in four different currencies, listed on ten exchanges in four countries.
RICI® aims to be an effective measure of the price action of raw materials not just in the United States but also around the world. Indeed, the index’s weights attempt to balance consumption patterns worldwide (in developed and developing economies) and specific contract liquidity.
The index is designed to offer stability, partly because it is broadly based and consistent in composition, and to meet a need in the financial spectrum currently not effectively covered.
Rogers International Commodity Index® Methodology
The Rogers International Commodity Indexes are maintained by their owner, Beeland Interests, Inc., who is advised by members of the Rogers International Commodity Index® Committee: a group of “wise people” just as are the people who determine the Dow Jones Averages and other major indexes.
For the sake of transparency, consistency, and stability, composition changes are infrequent. The Committee members generally monitor the Indexes daily for circumstances that warrant consideration of changes. The Committee meets formally in November or December of each year to assess the Indexes and discuss changes. Mr. James B. Rogers, Jr., as the founder of the RICI® and sole owner of Beeland Interests, chairs the RICI® Committee and is the final arbiter of its decisions.
The Committee of wise people bases its discussion on world consumption patterns and liquidity. Other indexes may show regular dramatic changes in weights and compositions meaning investors never know in what they are investing. This is not the case with the Rogers International Commodity Index®, which is stable, consistent and transparent. An investor in the Rogers Indexes always knows what he or she is getting.
The RICI® and its sub-indexes are calculated and published in real time.