The iShares® S&P GSCI™ Commodity-Indexed Trust (the “Trust”)
is a Delaware statutory trust that issues units of beneficial interest, called
“Shares,” representing fractional undivided beneficial interests
in its net assets. The Trust’s assets consist of long positions in exchange-traded
index futures contracts of various expirations, called “Index Futures,”
on the S&P GSCI™ Excess Return Index, or the “S&P GSCI-ER,”
together with “Collateral Assets” consisting of cash, U.S. Treasury
securities or other short-term securities and similar securities that are eligible
as margin deposits for those Index Futures positions.
iShares Delaware Trust Sponsor LLC, a Delaware limited liability company, is
the sponsor of the Trust (the “Sponsor”). BlackRock Institutional
Trust Company, N.A., an affiliate of the Sponsor, is the “Trustee”
of the Trust. The Trust is a commodity pool, as defined in the Commodity Exchange
Act (the “CEA”) and the applicable regulations of the Commodity
Futures Trading Commission (the “CFTC”), and is operated by the
Sponsor, a commodity pool operator registered with the CFTC. BlackRock Fund
Advisors (the “Advisor”), an indirect subsidiary of BlackRock, Inc.,
serves as the commodity trading advisor of the Trust and is registered with
the CFTC. The Trust is not an investment company registered under the Investment
Company Act of 1940, as amended (the “Investment Company Act”).
The Trust has delegated day-to-day administration of the Trust to the Trustee.
The Trustee has delegated certain day-to-day administrative functions of the
Trustee to State Street Bank and Trust Company (the “Trust Administrator”).
Wilmington Trust Company, a Delaware trust company, serves as the “Delaware
Trustee” of the Trust.
The Trust intends to offer Shares on a continuous basis. The Trust issues and
redeems Shares only in one or more blocks of 50,000 Shares (“Baskets”).
Only institutions that enter into an agreement with the Trust to become “Authorized
Participants” may purchase or redeem Baskets, in exchange for Index Futures
and Collateral Assets with an aggregate value equal to the net asset value per
Share, or “NAV” of the Shares being purchased or redeemed. Owners
of beneficial interest in Shares (“Shareholders”) who are not Authorized
Participants have no right to redeem their Shares. In order to liquidate their
investment in the Shares, Shareholders who are not Authorized Participants must
generally sell their Shares in the secondary market, assuming that demand for
their Shares exists. The price obtained by the Shareholders for the Shares may
be less than the NAV of those Shares.
The activities of the Trust are generally limited to:
issuing Baskets in exchange for Index Futures and cash (or, in the discretion
of the Sponsor, other Collateral Assets);
consistent with its investment objective, establishing, maintaining and closing
out positions in Index Futures and acquiring, holding and disposing of corresponding
Collateral Assets;
paying out of its assets any expenses and liabilities of the Trust not assumed
by the Sponsor; and
delivering proceeds consisting of Index Futures, cash and other Collateral
Assets in exchange for Baskets surrendered for redemption.
The Trust is a passive investor in Index Futures and the Collateral Assets held
to satisfy applicable margin requirements on those Index Futures positions.
The Advisor acts as the commodity trading advisor for the Trust, and is authorized
to transact in Index Futures, and acquire and dispose of the related Collateral
Assets on the Trust’s behalf. The Trust does not engage in any activities
designed to obtain a profit from, or to ameliorate losses caused by, changes
in the level of the S&P GSCI™ Total Return Index (the “Index”)
or the S&P GSCI-ER or the value of the Collateral Assets. To the extent
that the Trust accepts cash proceeds in connection with the creation of Shares,
the Trust will use that cash to purchase additional Index Futures and Collateral
Assets, in an amount that the Advisor determines will enable the Trust to achieve
investment results that correspond with the Index. At any time when Index Futures
of more than one expiration are listed on the Chicago Mercantile Exchange, the
“CME” or the “Exchange,” the Sponsor will determine,
pursuant to the terms of the Trust’s trust agreement, which Index Futures
will be transferred in connection with either the creation or redemption of
Baskets.
The Trust seeks to track the results of a fully collateralized investment in
futures contracts on an index composed of a diversified group of commodities
futures. The Trust seeks to track the investment returns of the Index before
payment of the Trust’s expenses and liabilities. The Trust holds long
positions in Index Futures whose settlement value at expiration is determined
based on the value of the S&P GSCI-ER at that time. The Trust also earns
interest on its non-cash Collateral Assets.
The S&P GSCI-ER is calculated based on the same commodities that are included
in the S&P GSCI™ Commodity Index, or the “S&P GSCI™,”
which is a production-weighted index of the prices of a diversified group of
futures contracts on physical commodities. The S&P GSCI-ER reflects the
return of an uncollateralized investment in the contracts comprising the S&P
GSCI™, and in addition incorporates the economic effect of “rolling”
the contracts included in the S&P GSCI™ as they near expiration. “Rolling”
a futures contract means closing out a position in an expiring futures contract
and establishing an equivalent position in a replacement futures contract on
the same commodity.
