Commodity Index

A commodity index is a benchmark that tracks the price performance of a basket of commodities—such as energy, metals, and agricultural products—providing a single measure of overall commodity market returns. Global indices like the S&P GSCI and Bloomberg Commodity Index are widely followed benchmarks. In India, commodity indices serve as the underlying basis for commodity ETFs and index funds, enabling investors to gain diversified exposure to the commodities asset class without directly trading futures contracts. Commodity indices are also used by institutional investors as a portfolio diversification tool, given that commodity prices often move independently of equity and bond markets.