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Dow Jones Indexes, UBS launch new commodity index

Dow Jones Indexes (DJ) and UBS Investment Bank have launched a new commodity index, the Dow Jones-UBS Roll Select Commodity Index.

The new index is a version of the DJ-UBS Commodity Index series and is aimed at lessening the negative effects of backwardation (contango) on index performance, according to DJ Indexes.

The roll select index rolls from the expiring futures contract into the contracts that show highest annualized roll yield for each commodity.

The DJ-UBS Commodity Index family are being regarded as popular commodity benchmarks due to the increasing interest of commodities in investor portfolios.

As of 30 June 2011, DJ-UBS Commodity Index had more than $80bn in assets under management.

The commodity index consists of futures contracts on physical commodities and includes 19 commodity futures in seven sectors.