Contributors Fiona Boal, Head of Commodities and Real Assets Jim Wiederhold, Associate Director Commodities and Real Assets
The S&P GSCI paved the way for three decades of index innovation in the commodities market and is the most widely recognized commodities index benchmark, just as when it launched in April 1991. Its broad base and production-weighted approach offers market participants true global commodities market beta. Including the most liquid commodity futures and adapting to changing market dynamics via a rules-based, transparent annual reconstitution, the index is investable and easily replicable.
Beyond the headline S&P GSCI, the S&P GSCI Series plays an integral role in the world’s investment infrastructure, whether it be as benchmarks, defining the investable universe, or measuring the unique return streams of commodities and commodities strategies. Exhibit 1 highlights innovation in the S&P GSCI family over the last 30 years.
While 30 years is a lifetime in commodities investing and there have been a number of marquee index-based solutions brought to market over this time, we anticipate that the next 30 years could bring even more disruptive changes to commodities. In this paper, we look at trends that could become ascendant over the next 30 years of commodities index innovation.
Exhibit 1: 30-Year Performance of the S&P GSCI
Source: S&P Dow Jones Indices LLC. Data from April 1991 to February 2021. Past performance is no guarantee of future results. Chart is provided for illustrative purposes.
