By Tim Wood –
NEW YORK (ResourceInvestor.com) — Before this current commodity up-cycle retail investors had to be content with very indirect exposure to the actual natural resources rather than the companies that mined, traded or manufactured them.
Now new vehicles are sprouting everywhere offering general and specific long exposure to spot and futures markets in things like gold, oil and silver.
The newest commodity fund filing for registration comes from the prolific Barclays Global Investors stable. The ETF giant has filed a Registration Statement with the Securities & Exchange Commission for the iShares GSCI® Commodity–Indexed Trust.
GSCI refers to the well regarded Goldman Sachs Commodity Index which is a global production weighted index. It covers 24 commodity futures in precious metals, base metals, energy, feedstock and livestock, and which are individually traded on various international exchanges. The Index is heavily energy weighted as can be seen by visiting Goldman Sachs
The Barclays fund is intended to track the GSCI Total Return Index which in turn “measures a fully collateralized commodity futures investment.”
To date investors could only gain exposure to the GSCI Total Return Index through a futures contract listed on the Chicago Mercantile Exchange which was rather exotic compared with what Barclays is offering.
Barclays intends offering almost 14 million shares with an aggregate value of almost $700 million. Management fees are set at 75 basis points, and the securities are treated as a partnership for tax purposes.
The GSCI is a natural complement to the existing iShares Goldman Sachs Natural Resources Index Fund [IGE] which is focused on companies in several natural resources including timber and paper. That fund is worth $800 million and is much larger than the similar iShares Dow Jones U.S. Basic Materials Sector Index Fund [IYM] which is worth $387 million.
Another recent index product is the Reuters/Jefferies CRB (RJ/CRB) Futures Price Index which began trading on 12 July facilitated by the New York Board of Trade (NYBOT).
The venerable CRB Index has finally had a long overdue makeover and now trades as the Continuous Commodity Index [CI].
Perhaps some enterprising firm will now launch a more retail investor friendly way to trade the CRB Index, which remains the de facto standard for tracking blended commodity performance.
Source: Resource Investor
There already is a commodity ETF in Europe. It’s called EasyETF GSCI and also tracks the GSCI Total Return index with very low fees (0.45%) however, it is only traded on European exchanges – German and Swiss. It can be found on the electronic Xetra exchange for example
Tim,
Thank you for the commodities index fund info. I’m a retail investor and have been scouring the web for commodities index funds to invest in. Jim Rogers’ fund is not yet allowable in my state, MI. So far the only funds I’ve found are POCMX, PCRAX and QRAAX. All are standard funds, traded once a day, expense ratios 1.25% and above. I’m sure alot of other investors are also impatiently awaiting Barclays’ iShares GSCI® Commodity–Indexed Trust.
Richard
ivans@msu.edu