S&P defends futures-based ETPs

Many ETPs providing exposure to commodities track an index that invests in a basket of futures contracts, often across a number of markets. McGlone says using indices such as the S&P GSCI, one of the most widely followed benchmark for commodities, never directly impacts on supply and demand but does influence prices. He adds: "If you bid up price, you create supply." McGlone also defends futures-based investments against the accusation that returns are eroded by the cost of rolling over contracts when the market is in contango. He points out such effects are cyclical, balanced b...