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| Rogers International Commodities Index (RICI) |
The Rogers International Commodity Index (RICI) is a composite, U.S. dollar-based, total return commodity index, created by the investment legend Jim Rogers in 1998. RICI represents the value of a basket of 36 diferent exchange-traded physical commodities consumed in the world economy, spanning from agriculture to energy to metal products, combined with the returns of the 3 month U.S. Treasury bill rate held as collateral.
The selection and weighting of the portfolio is reviewed annually in December by the RICI Committee, which consists of the chairman Jim Rogers and one representative of each party: UBS, Daiwa Securities, Beeland Management, Diapason Commodities Management, and ABN Amro.
Only the chairman can recommend new members for the committee. The selection criteria for futures contracts to be included in the RICI are an important role in global (developed and developing economies) consumption and public tradeability on an exchange to guarantee tracking and verification.
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In terms of ensuring liquidity, the most liquid futures contract internationally, in terms of volume and open interest, is chosen for computation of the RICI, if a commodity trades on several exchanges.
To maintain stability and investability, the composition of the RICI is only altered under uncompromising circumstances, such as, nonstop unfavorable trading conditions for a single futures contract or critical changes in international consumption patterns.
The Chicago Mercantile Exchange in collaboration with Merrill Lynch offer TRAKRS (total return asset contracts), which are exchange-traded, nontraditional futures contracts on the RICI.
