S&P announces launch of equally weighted version of S&P GSCI index

By Devika Patel

Knoxville, Tenn., Sept. 9 - Standard & Poor's said it launched the S&P GSCI Equal Weight Select index, an equally weighted version of the S&P GSCI index.

The S&P GSCI Equal Weight Select index is comprised of 14 commodities included in the world-production weighted S&P GSCI, each equally weighted on a quarterly basis.

The index divides the S&P GSCI into six commodity groups from which only the largest and most liquid commodities are selected. The six commodity groups are agriculture - grains and oilseeds, agriculture - softs, energy, industrial metals, livestock and precious metals.

Compared to the S&P GSCI, the new index will have higher exposure to commodities with lower production weights as a result of the equal weighting. The relative performance of the two indexes will also differ depending on the size premium in different market cycles. Finally, because there are fewer commodities in the S&P GSCI Equal Weight Select index than the S&P GSCI, there will be fewer monthly rolls.

"The S&P GSCI Equal Weight Select index is a natural extension of our widely followed S&P GSCI index providing a different dynamic by measuring the performance of only the largest and most liquid commodities within the S&P GSCI equally," Michael McGlone, S&P Indices' director of commodity indexing, said in a news release. "The development of the index was based on investor/client demand for a version of the S&P GSCI that provided more equal weighting among the main commodities."

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