| It will provide a snapshot of a particular asset class or market at a given point of time. |
| RCIX is expected to evolve into a useful mechanism to include the commodity futures as part of an investment portfolio and aims at easy replicability. |
| The managing director of Refco India, Vineet Bhatnagar, said, "The index would be a useful investment tool especially for retail investors and high net worth individuals, keeping in mind the rising inflation and noting the fundamentally lesser volatility in the commodity markets during such times." |
| The index would be a weighted aggregation of select commodity future contracts being traded on the two largest exchanges, Multi Commodity Exchange (MCX) and the National Commodities and Derivatives Exchange of India (NCDEX). |
| The weights would be revised monthly, as commodities include factors that would be seasonal in nature. |
| RCIX would be rolled over every month from the sixth to the next four business days, in order to stabilise the effect on the portfolio. |
| The selection parameters of commodities include the trading volume in rupee terms along with the open interest on the basis of the number of contracts, and the fundamental strength of the commodity in India. |
| For inclusion in RCIX, a commodity would have to have an aggregate weighting of 1 per cent based on these parameters. |
| The index, in comparison to the most popular international commodity indices like Reuters CRB Index, Goldman Sachs Commodity Index, S&P Commodity Index and Dow Jones AIG Commodity Index, would have eight underlying commodities. |
| For larger portfolios however, the errors of tracking through RCIX were likely to be slightly higher than in the equity indices, as the lot size (generally in kilogram or tonne) was fixed. |
| Currently index based trading was not permitted on the commodity exchanges. |
| The base of the RCIX was dated April 1, 2004, calculated on the basis of trading history from January to March 2004. |
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