| Goldman Sachs created the GSCI commodity index back in 1991, with the intention of getting asset managers to use it as a benchmark for commodity investment, but also as an improved way of measuring inflation. Specifically, the index was pitched as a better measure than that being provided by Commodity Research Bureau’s (CRB) futures index, because it included a mix of products that Goldman said better reflected real inflation.
In support of the countercyclical diversification case, back-tested returns from 1970-1990 showed the GSCI was negatively correlated with the S&P 500 and government bonds, meaning a basket of GSCI commodities could improve annual returns for investors...............................................Full Article: Source
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