iPath S&P GSCI Total Return Index ETN (GSP)

Overview

The S&P GSCI® Total Return Index is a comprehensive commodity index offering investors a reliable and publicly available benchmark for investment performance in the commodity markets. The index is designed to provide investors with exposure to the returns that may be available from an unleveraged investment in physical commodities or commodity futures contracts, plus the rate of interest that could be earned on cash collateral invested in short-term U.S. Treasury Bills. It reflects both the returns related to the price movements of the commodities included in the S&P GSCI® and the gain or loss from "rolling" futures contracts, as well as the interest income from the hypothetical Treasury Bill investment. Created to offer a broad representation of the global commodities market, this index is a tool for investors looking to diversify their portfolios, hedge against inflation, or take a position on the commodities market.

Products and Services

• S&P GSCI® Total Return Index

This is the primary offering, designed for investors seeking exposure to the commodity markets. It includes two major components: the investment in commodity futures contracts represented by the S&P GSCI®, and an interest component that assumes the funds committed to these contracts are instead invested in short-term U.S. Treasury Bills. This dual approach provides both the potential for returns from the commodities market along with interest income, aiming to reflect a total return investment strategy in commodities.

• Unleveraged Investment in Commodity Futures

An essential part of the S&P GSCI® Total Return Index involves exposure to various commodities through an unleveraged investment in futures contracts. This means the index tracks the investment results that might be obtained from holding futures contracts on the commodities in the index without utilizing borrowed money to increase the size of the investment. The diversified basket of contracts spans across several sectors, including energy, agriculture, precious metals, and industrial metals, among others, reflecting a broad-based commodities investment strategy.

• Interest on Funds Committed to Trading Underlying Contracts

The index also accounts for the interest that could be earned on the cash that would otherwise be committed to trading the underlying commodity futures contracts. This component assumes that such funds are instead invested in short-term U.S. Treasury Bills, a nearly risk-free asset, thereby adding a layer of return that is typically not associated with direct commodities investment. This interest component is integral to the total return aspect of the index, as it seeks to capture not just the market movements of commodities but also the potential for income from cash holdings.