iPath

We have adopted the iPath Exchange Traded Note (ETN), benchmarked to the Goldman Sachs Commodities Total Return Index (GSCI), as our preferred commodities asset class vehicle.  This iPath ETN, which began trading under the ticker “GSP” in June 2006, is a senior, unsecured, unsubordinated debt security issued by Barclays Bank PLC.  Unlike a mutual fund, GSP trades throughout the day like a stock, but is structured such that its return is exactly equal to the performance of the GSCI, less a very small management fee.  Because the future return of GSP is not determined in advanced (like a “zero coupon note”) and there are no interest payments, iPath expects that there will be no tax consequences until a position is sold or until maturity in 2036.  

We are excited about the ability of GSP to provide liquid, cost-effective, and tax efficient exposure to commodities, a sector which has been plagued by high fees and extreme tax inefficiency.  GSP will be used to establish new positions in commodities and the Investment Committee is working with client service teams to establish a tax-sensitive approach to reallocating existing positions.

_