What are MCX METLDEX and MCX BULLDEX?
- India’s first base metal futures index. It is launched by Multi Commodity Exchange (MCX), the country’s leading commodity bourse. The index will track the real-time performance of a basket of MCX base metals futures and facilitate efficient price risk management across the value chain.
- METLDEX is based on the five base metals – zinc, copper, nickel, lead and aluminium. Until now, domestic metal were pivoted to the London Metal Exchange (LME) prices but will end with the launch of METLDEX.
- METLDEX futures offers retail investors an opportunity of investing in the industrial sector as a whole without the need to analyse each and every commodity separately.
- Base Metals Index trading will facilitate instant portfolio diversification and encourage passive, thematic elements in portfolios.
- The Index can emerge as a new real time barometer for Indian metal industry.
- MCX had previously launched the country’s first bullion index, MCX iCOMDEX Bullion or BULLDEX. The Index will track the real-time performance of the gold and silver futures contracts.
- The weightage of gold is 70.52 percent and the remaining 29.48 percent is silver. The weights will be rebalanced every January.
- The real-time index values will act as the perfect benchmark that can be replicated with low tracking error for passive investment strategies and help in managing portfolios efficiency.
- The product will help market participants to optimise their asset allocation through portfolio diversification due to its low correlation to equity.
- BULLDEX is convenient as the contracts are settled in cash. Gold is considered as a currency of last resort and a safe haven in times of economic and geo-political distress. On the other hand, silver is an industrial commodity mainly used in manufacturing and industrial fabrication.