Exploring Commodity Indices: S&P GSCI vs Bloomberg Commodity Index

Assume you are an investment advisor discussing the merits of commodity indices with a client who is considering diversifying his portfolio by allocating a portion of it to commodities. The client has expressed concern about volatility and market exposure associated with such investments.

In your response, explain the structure and composition of commodity indices, comparing at least two types of indices, such as the S&P GSCI and the Bloomberg Commodity Index. Discuss the implications of these structures on the investor's exposure to various commodities, the potential volatility of these indices, and their performance characteristics in different economic environments. Additionally, include the potential benefits and drawbacks of investing in commodity indices as opposed to direct investments in physical commodities.