iShares S&P GSCI Commodity-Indexed Trust 10-K

Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.   Market Information   On December 27, 2007, the Shares commenced trading on NYSE Arca under the ticker symbol GSG. Prior to that, the Shares were traded on the NYSE, also under the symbol GSG, since their initial public offering on July 19, 2006.   Holders   As of December 31, 2022, there were approximately 114 DTC participating shareholders of record of the Trust. Because most of the Trust’s Shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.   Dividends   The Trust did not declare any cash distributions to Shareholders during the fiscal years ended December 31, 2022 and 2021. The Trust has no obligation to make periodic distributions to Shareholders.   Use of Proceeds from Registered Securities   Not applicable.   Purchases of Equity Securities by the Issuers and Affiliated Purchasers   12,900,000 Shares (258 Baskets) were redeemed during the fourth quarter of the year ended December 31, 2022.   Period   Total Number of Shares Redeemed     Average Price Per Share   10/01/22 to 10/31/22     650,000     $ 22.05   11/01/22 to 11/30/22     800,000       21.44   12/01/22 to 12/31/22     11,450,000       20.59   Total     12,900,000     $ 20.74     25 Table of Contents   Item 6. [Reserved]     Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.   This information should be read in conjunction with the financial statements and notes to financial statements included with this report. The discussion and analysis that follows may contain statements that relate to future events or future performance. In some cases, such forward-looking statements can be identified by terminology such as “ may, ” “ should, ” “ could, ” “ expect, ” “ plan, ” “ anticipate, ” “ believe, ” “ estimate, ” “ predict, ” “ potential ” or the negative of these terms or other comparable terminology. None of the Trust, the Sponsor, the Advisor, the Trustee or the Delaware Trustee assumes responsibility for the accuracy or completeness of any forward-looking statements. Except as required by applicable disclosure laws, none of the Trust, the Sponsor, the Advisor, the Trustee or the Delaware Trustee is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in expectations or predictions.   Introduction   The Trust was originally part of a two-tiered structure that transacted in Index Futures through its subsidiary, the Investing Pool. Following the close of business on December 31, 2013, the Investing Pool was liquidated and the interests in the Investing Pool held by the Trust and the Investing Pool’s manager were redeemed for all assets and liabilities held by the Investing Pool. As a result of the liquidation of the Investing Pool, the Trust now holds and transacts in Index Futures directly. Historical results reflect the Trust’s activities, had it conducted its activities directly rather than through the Investing Pool.   During the period beginning July 10, 2006 (commencement of operations) and ending on December 31, 2022 (the Trust’s most recent fiscal year-end), the Trust’s net asset value grew from $7,358,911 at July 10, 2006 to $1,221,109,857 at December 31, 2022. Outstanding Shares in the Trust grew from 150,000 Shares at July 10, 2006 to 57,550,000 Shares at December 31, 2022.   As described in Part I above, the Trust seeks to track the results of a fully collateralized investment in futures contracts on an index composed of a diversified group of commodity futures. The Trust seeks to track the investment returns of the Index before payment of the Trust’s expenses and liabilities. The Index is a statistical composite that tracks a diversified group of commodity futures. The Index does not actually hold a portfolio of futures contracts and does not incur the fees and expenses incurred by the Trust. These fees and expenses negatively impact the Trust’s performance relative to that of the Index.   The following graph presents the change in NAV of the Trust and the closing level of the Index for the years ended December 31, 2022, 2021 and 2020:     26 Table of Contents   Results of Operations   The Year Ended December 31, 2022   The Trust’s net asset value decreased from $1,431,810,115 at December 31, 2021 to $1,221,109,857 at December 31, 2022. The decrease in the Trust’s net asset value resulted primarily from a net decrease in the number of outstanding Shares, which fell from 83,750,000 Shares at December 31, 2021 to 57,550,000 Shares at December 31, 2022, a consequence of 22,900,000 Shares (458 Baskets) being created and 49,100,000 Shares (982 Baskets) being redeemed during the year. The decrease in the Trust’s net asset value was partially offset by a net increase in net assets resulting from operations.   The 24.09% increase in the NAV from $17.10 at December 31, 2021 to $21.22 at December 31, 2022 is directly related to the 23.44% increase in the settlement price for the Index Futures. The NAV increased slightly more than the settlement price for the Index Futures on a percentage basis due to the interest income from U.S. Treasury bills.   The net increase in net assets resulting from operations for the year ended December 31, 2022 was $390,808,622, resulting from a net investment income of $7,523,923 and a net realized and unrealized gain of $383,284,699. For the year ended December 31, 2022, the Trust had a net realized and unrealized gain of $315,841 on short-term investments and a net realized and unrealized gain of $382,968,858 on futures contracts. Other than the Sponsor’s fees of $13,482,545 and brokerage commissions and fees of $1,299,610, the Trust had no expenses during the year.   The Year Ended December 31, 2021   The Trust’s net asset value increased from $827,346,620 at December 31, 2020 to $1,431,810,115 at December 31, 2021. The increase in the Trust’s net asset value resulted primarily from a net increase in net assets resulting from operations. The Trust’s net asset value also benefitted from an increase in the number of outstanding Shares, which rose from 67,250,000 Shares at December 31, 2020 to 83,750,000 Shares at December 31, 2021, a consequence of 34,750,000 Shares (695 Baskets) being created and 18,250,000 Shares (365 Baskets) being redeemed during the year.   The 39.02% increase in the NAV from $12.30 at December 31, 2020 to $17.10 at December 31, 2021 is directly related to the 40.29% increase in the settlement price for the Index Futures. The NAV increased slightly less than the settlement price for the Index Futures on a percentage basis due to the Sponsor’s fees and brokerage commissions.   The net increase in net assets resulting from operations for the year ended December 31, 2021 was $366,008,957, resulting from a net investment loss of $10,385,215 and a net investment gain of $376,394,172. For the year ended December 31, 2021, the Trust had a net realized and unrealized gain of $4,847 on short-term investments and a net realized and unrealized gain of $376,389,325 on futures contracts. Other than the Sponsor’s fees of $9,465,137 and brokerage commissions and fees of $1,346,112, the Trust had no expenses during the year.   The Year Ended December 31, 2020   The Trust’s net asset value increased from $775,343,105 at December 31, 2019 to $827,346,620 at December 31, 2020. The increase in the Trust’s net asset value resulted primarily from a net increase in the number of outstanding Shares, which rose from 47,750,000 Shares at December 31, 2019 to 67,250,000 Shares at December 31, 2020, a consequence of 31,850,000 Shares (637 Baskets) being created and 12,350,000 Shares (247 Baskets) being redeemed during the year. The increase in the Trust’s net asset value was partially offset by a net decrease in net assets resulting from operations.   The 24.26% decrease in the NAV from $16.24 at December 31, 2019 to $12.30 at December 31, 2020 is directly related to the 24.02% decrease in the settlement price for the Index Futures. The NAV decreased slightly more than the settlement price for the Index Futures on a percentage basis due to the Sponsor’s fees and brokerage commissions.   The net decrease in net assets resulting from operations for the year ended December 31, 2020 was $183,615,251, resulting from a net realized and unrealized loss of $181,338,900 and by a net investment loss of $2,276,351. For the year ended December 31, 2020, the Trust had a net realized and unrealized loss of $19,454 on short-term investments and a net realized and unrealized loss of $181,319,446 on futures contracts. Other than the Sponsor’s Fees of $5,005,767 and brokerage commissions and fees of $1,013,439, the Trust had no expenses during the year.   Liquidity and Capital Resources   The Trust’s assets as of December 31, 2022 consist of Index Futures and Collateral Assets used to satisfy applicable margin requirements for those Index Futures positions. The Trust does not anticipate any further need for liquidity, because creations and redemptions of Shares generally occur in kind and ordinary expenses are met by cash on hand. Interest earned on the assets posted as collateral is paid to the Trust and is used to pay the Sponsor’s Fees and purchase additional Index Futures and Collateral Assets, or, in the discretion of the Sponsor, distributed to Shareholders. For the year ended December 31, 2022, interest income was $22,306,078, while the Sponsor’s Fees totaled $13,482,545. For the year ended December 31, 2021, interest income was $426,034, while the Sponsor’s Fees totaled $9,465,137. For the year ended December 31, 2020, interest income was $3,742,855, while the Sponsor’s Fees totaled $5,005,767. In exchange for a fee based on the net asset value of the Trust, the Sponsor has assumed most of the ordinary expenses incurred by the Trust. In the case of an extraordinary expense and/or insufficient interest income to cover ordinary expenses, however, the Trust could be forced to liquidate its positions in Index Futures and Collateral Assets to pay such expenses. As of December 31, 2022, the market for Index Futures had not developed significant liquidity and the Trust represented substantially all of the long-side open interest in Index Futures. In addition, it is expected that Goldman Sachs or its accountholders may represent, directly or indirectly, a substantial portion of the short-side interest in such market.   The existence of such a limited number of market participants could cause or exacerbate losses to the Trust if the Trust were required to liquidate its Index Futures positions.   The Sponsor is unaware of any other trends, demands, conditions or events that are reasonably likely to result in material changes to the Trust’s liquidity needs.   27 Table of Contents   Because the Trust trades Index Futures, its capital is at risk due to changes in the value of the Index Futures or other assets (market risk) or the inability of counterparties to perform (credit risk).   Market Risk   The Trust holds Index Futures positions and Collateral Assets to satisfy applicable margin requirements on those Index Futures positions. Because of this limited diversification of the Trust’s assets, fluctuations in the value of the Index Futures are expected to directly affect the value of the Shares. The value of the Index Futures is expected to track generally the S&P GSCI-ER, although this correlation may not be exact. The S&P GSCI-ER, in turn, reflects the value of a diversified group of commodities. The Trust’s exposure to market risk will be influenced by a number of factors, including the lack of liquidity of the Index Futures market and activities of other market participants.   Credit Risk   When the Trust purchases or holds Index Futures, it is exposed to the credit risk of a default by the CME’s clearing house, which serves as the counterparty to each Index Futures position, and of a default by its FCM or Clearing FCM. In the case of such a default, the Trust may be unable to recover amounts due to it on its Index Futures positions and Collateral Assets posted as margin. The Trust is also exposed to credit risk as a result of its ownership of U.S. Treasury bills.   Off-Balance Sheet Arrangements and Contractual Obligations   The Trust does not use and is not expected to use special purpose entities to facilitate off-balance sheet financing arrangements. The Trust does not have and is not expected to have loan guarantee arrangements or other off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions related to certain risks service providers undertake in performing services that are in the interest of the Trust. While the Trust’s exposure under such indemnification provisions cannot be estimated, these general business indemnifications are not expected to have a material impact on the Trust’s financial position.   Critical Accounting Policies   The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. In addition, please refer to Note 2 to the financial statements of the Trust for further discussion of the Trust’s accounting policies.