GSG ETF Review: Is iShares Commodity ETF Worth Buying?

iShares S&P GSCI Commodity-Indexed Trust tracks the Goldman Sachs Commodity Index with even heavier energy weighting than DBC, making it the most energy-concentrated broad commodity vehicle — a direct bet on oil and gas prices with some diversification from agriculture and metals.

Last updated: 2026-02-02 · Data: Yahoo Finance, fund prospectuses, SEC filings

What Is GSG?

GSG tracks the S&P GSCI, a production-weighted index of physical commodities spanning energy, metals, agriculture, and livestock. BlackRock's fund uses futures contracts to provide exposure to this broad commodity basket without the storage headaches of owning barrels of oil or tons of wheat. Think of it as the S&P 500 for stuff you can actually touch.

The fund launched in 2006 with a 0.75% expense ratio and currently manages $1.08 billion in assets.

Current Snapshot

Why It Matters for Real Asset Investors

GSG serves as the portfolio's inflation early warning system. When governments print money and currencies weaken, commodities historically rise because they're priced in those same debasing currencies. This isn't a growth story—it's an insurance policy against monetary debasement.

The fund shines during stagflationary periods when traditional 60/40 portfolios struggle. Energy dominates the index at roughly 60% weight, making GSG particularly sensitive to oil price moves and geopolitical supply disruptions. Agriculture and metals provide additional diversification, though energy's heavy weighting means this isn't truly balanced commodity exposure.

GSG works best as a tactical allocation during specific macro regimes rather than a core holding. It tends to struggle during deflationary periods, strong dollar environments, and when central banks maintain credible anti-inflation policies.

Top Holdings

The S&P GSCI's production weighting creates significant concentration in energy commodities:

WTI Crude Oil (25-30%): The benchmark for U.S. oil prices, sensitive to both supply disruptions and demand cycles.

Brent Crude Oil (20-25%): International oil benchmark, often trades at premium to WTI due to transportation costs.

Natural Gas (5-8%): Highly volatile, seasonal patterns, increasingly important for power generation and industrial use.

Gasoline RBOB (4-6%): Refined petroleum product, reflects both crude costs and refining capacity constraints.

Heating Oil (3-5%): Distillate fuel, seasonal demand patterns, proxy for diesel and jet fuel.

The remaining allocation spans agricultural commodities (wheat, corn, soybeans), industrial metals (copper, aluminum), and precious metals (gold, silver), though their weights remain modest compared to energy's dominance.

How It Fits the Portfolio

GSG works as a 2-5% tactical allocation during specific macro environments, not a permanent portfolio anchor. I'm watching for entry points when the dollar weakens, inflation expectations rise, or geopolitical tensions threaten commodity supply chains.

The fund pairs well with infrastructure REITs and energy MLPs since all three benefit from commodity price strength. However, GSG's volatility and tracking challenges—futures contango can create drag during calm periods—make position sizing critical. This isn't a set-and-forget holding.

Consider GSG when 10-year breakeven inflation rates exceed 3% or when the dollar index breaks below key technical levels. The fund typically outperforms during the early stages of inflation cycles before central banks respond aggressively.

Regime Signals

GSG outperforms during three key macro conditions: currency debasement cycles, supply-shock inflation, and geopolitical commodity disruptions. The fund thrives when central banks prioritize growth over price stability, creating negative real interest rates that boost commodity demand.

Dollar weakness amplifies returns since commodities are dollar-denominated. A falling DXY often coincides with GSG's strongest periods. Conversely, aggressive Federal Reserve tightening cycles typically crush commodity prices as demand destruction outweighs supply constraints.

Watch for seasonal patterns in agricultural components and refinery maintenance cycles that can create temporary price spikes. However, energy's dominance means oil market dynamics drive most of GSG's performance regardless of other commodity movements.

Related Research

• Alabama Power Grid Risk Assessment
• Exxon Mobil (XOM) Tollbooth Analysis
• DBC: Invesco DB Commodity Index Tracking
• PDBC: Invesco Optimum Yield Diversified Commodity
• Chevron (CVX) Tollbooth Analysis

Frequently Asked Questions

How does GSG differ from DBC?

GSG tracks the S&P GSCI, which weights commodities by global production volume, resulting in approximately 60-70% energy exposure — significantly more than DBC's 50-60%. This makes GSG more volatile and more sensitive to oil price movements. GSG also uses a simpler roll methodology than DBC's optimized approach, potentially resulting in higher contango drag. DBC is generally preferred by most investors for its better roll management and more balanced commodity exposure.

What is the expense ratio of GSG?

GSG charges a 0.75% expense ratio, slightly below DBC's 0.85%. However, the total cost comparison must include roll yield differences, where DBC's optimized strategy typically outperforms GSG's standard front-month approach. After accounting for roll costs, the effective cost of ownership may be similar or even favor DBC despite its higher stated expense ratio.

Does GSG issue a K-1 tax form?

Yes, GSG is structured as a grantor trust and issues K-1 tax forms. This creates the same tax filing complexity as DBC. Investors seeking to avoid K-1s should consider PDBC as an alternative broad commodity vehicle. The K-1 issue is a significant practical consideration that makes GSG less convenient than standard equity ETFs for most individual investors.

When would an investor choose GSG over DBC?

GSG is appropriate for investors who specifically want heavier energy commodity exposure within a diversified commodity wrapper. If you believe oil and gas prices will outperform other commodities, GSG's production-weighted methodology naturally concentrates in energy. However, for balanced commodity exposure with better roll management, DBC is the superior choice. Energy Macro generally prefers DBC or PDBC for broad commodity allocation.

For our complete allocation framework across real assets, infrastructure, and income strategies, see The Blackout Fortune Playbook.

Last updated: February 1, 2026 | Data: Yahoo Finance, BlackRock filings