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GSP in Depth


The five minute guide to the S&P GSCI Total Return Index ETN

The rapid development of the ETF industry has cracked the world of commodity investing wide-open, allowing average investors to gain cheap and easy access to a previously hard-to-reach asset class. And while some choose to focus on a single commodity, many investors are looking for more diversified exposure to the whole space.

Enter iPath's S&P GSCI Total Return Index ETN (NYSEARCA:GSP), one of the oldest commodity-basket ETPs on the market. Since inception in 2006, the fund has accumulated more than $113 million in total assets and remains as one of investors' top picks for broad-based commodity investing.

Although other "total" commodity ETPs are now available on the market, GSP still stands out with its product structure, portfolio composition, and the resulting unique risk/return profile. And considering how long this fund has been in existence, its resilience perhaps warrants a closer look from investors.

Vital Stats

Here's a quick overview of the basics of GSP:
  • Issuer: Barclays iPath
  • Index: S&P GSCI Total Return Index
  • Number of Commodities: 24
  • Largest Allocation: Crude oil (29.27%)
  • Inception Date: June 6, 2006
  • Expense Ratio: 0.75%
  • Assets: $113.3 million (as of 10/10/2012)
  • Structure: Exchange-Traded Note
Under the Hood

GSP seeks to replicate the S&P GSCI Total Return Index, offering exposure to 24 different commodity futures contracts. The index breakdown by commodity family is presented in the following table (as of 10/10/2012) :

GSP features allocations across all of the major segments of the commodity market, including exposure to energy, precious metals, agriculture, industrial metals, and livestock. However, GSP's underlying portfolio is far from balanced; this ETN is heavily tilted towards energy commodities, which account for over two-thirds of total assets.
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