COMPASS

Commodity Industry Indices

INDEX DESCRIPTION

Being at the heart of the commodity value chain: the Transformation Industry

Compass Commodity Industry Indices provide investors with efficient investment tools to play one of the most critical part of the real economy: the commodity transforming industry.

Emerging markets economies will continue to grow faster than developed markets over the next years.

The economic sectors that will mainly generate this growth will be consumption, transformation and infrastructure driven.

The best vectors to play this growth are commodities (both production & consumption oriented) and related services (infrastructure, transformation, logistic).

The industry linked to the processing/ transforming phase represents billions of USD and is a key actor in the value chain of finished products.

 

At Compass we have designed the Compass Commodity Industry Indices to bring investors with pure exposure to the main Industrial spreads used by transforming industries to make decisions

A new way to invest in commodities

Our family of indices allow investors to translate economic decisions from key Transforming Industrial players into trading opportunity

The Compass Commodity Industry Indices family allows investors to take position on the main industrial spreads driving industrials behaviors.

Each Compass Commodity Industry Index represents the performance of an investment maintaining a long position in an Industrial Spread.

According to a proprietary methodology developed by Compass, each Industrial Spread is rolled and readjusted every month to keep controlled leverage and to create a continued index.

The resulting Compass Commodity Industry Index represents the most unbiased exposure to the underlying Industrial Spread.

A easy way to benefit from anticipated industrial decisions

EXAMPLE

An easy way to implement rational industrial decisions

Investment case:

Over last years, many investors tried to benefit from the tense situation happening in the US on the gasoline market. Indeed with a strong crude price decrease, the last 3 years have seen record demand for gasoline in the US and in many emerging countries. Coupled with strong export, US gasoline has been the hot topic in the oil space since 2014.

Investment tools to implement the case:

Most of investors willing to play the increase of tension on this market took positions on US RBOB gasoline, mainly through ETF or similar products. Knowing that more than 90% of gasoline price moves are linked to crude oil price moves, they would have better flipped a coin and hope everything would have been alright.

Indeed, the only efficient way to play the significant increase in gasoline demand is to take a position on the ability of US refiners to provide or not enough gasoline. The best way to do that is to take a position on the profitability of those industrial actors.

The Compass Commodity Industry US Gasoline Refinery Margin Index provides a simple and unique access to the most efficient way to get exposure to US refiners profitability on gasoline process.

Its methodology replicates the refinery margins of a US refiner focusing on RBOB gasoline only.

The chart below represents the evolution of an investment of 100$ in September 2013 in a traditional RBOB gasoline Commodity index and the same investment in the Compass Commodity Industry US Gasoline Refinery Margins Index

INDEX FAMILY LIST

A set of indices to implement innovative trade ideas

INDEX MANUAL

This document is available under request. Please leave us your email.

COMPASS Financial Technologies SA

Avenue d'Ouchy 4

1006 Lausanne, Switzerland

info@compass-ft.com