The ICE® BofA® Commodity Index eXtra (MLCX) is designed to provide a liquid, consistent, representative and cost-efficient benchmark for measuring commodity market performance. MLCX constituent selection and weighting takes account of the liquidity of the constituent futures contracts (the "MLCX Contracts") and the value of the global production of each underlying commodity. These criteria help to ensure that the Index reflects the relative significance of these commodities in the global economy.
The MLCX contains six market sectors: Energy, Base Metals, Precious Metals, Grains & Oil Seeds, Livestock and Soft Commodities & Others (each, a “Market Sector”). As a general rule, each Market Sector contains a minimum of two and a maximum of four MLCX Contracts. However, the MLCX was revised in 2014 to allow the Energy sector to expand to five commodities by including both WTI and Brent crude oil contracts (as opposed to only Brent in 2013). This change was adopted to reflect the development of two distinct oil markets: North America (WTI) and Rest of the World (Brent) crude production.
MLCX is supported by a comprehensive family of sector, single commodity and modified indices. Total return, excess return and spot versions of the indices are compiled.
Specifications
Key Features
ICE Data Indices is the Administrator of the Index (“Index Administrator”). To assist in the operation of the Index, IDI has established an advisory committee (“Index Advisory Committee”) comprised of members of IDI that has primary responsibility for review and maintenance of the MLCX and its methodologies. Ultimately, governance of the MLCX falls under the oversight of the Index Governance Committee ("IGC") of IDI.
As part of its annual review, the Index Advisory Committee, subject to approval by the IGC, reviews the set of exchanges from which MLCX constituent futures contracts will be selected (the “Selected Exchanges”). The selection and weighting of the MLCX Contracts is typically determined once a year, based on data as of June 30, and the annual rebalancing changes are applied beginning with the January 1 calculation. The principal criterion for the selection of Eligible Contracts is “Liquidity”, measured in terms of a contract’s notional value of traded contracts. The MLCX is calculated on the basis of the respective weights of the MLCX Contracts and the applicable Reference Prices in accordance with the formulas set forth in the Commodity Index Methodology, which can be found on the ICE Index Platform (indices.ice.com) Capitalized terms herein are defined in the Commodity Index Methodology.
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