ETF Spotlight on PowerShares DB Energy (NYSEArca: DBE), part of a weekly series.
Assets: $254 million
Objective: Aims to track the Deutsche Bank Liquid Commodity Index – Optimum Yield Energy Excess Return
Holdings: DBE is a rules-based index made up of futures contracts on oil, heating oil, gasoline and natural gas
What You Should Know
- DBE charges a 0.75% expense ratio, putting it roughly in the middle for funds that track energy futures
- Most commodities – crude oil, brent crude, heating oil and gasoline – account for 22.5% each of the ETF; natural gas is 10%
- If you’re looking for a diversified basket of energy futures, this ETF gives it
- PowerShares has contango-fighting roll strategies built into its futures-based funds, which rolls contracts to the most advantageous month instead of automatically rolling to the next month
The Latest News
- Most fuel prices are on fire: oil is above $100 a barrel, gas is inching above $5 a gallon and the cost of heating up homes is rising for Americans.
- Economic recovery, emerging market demand and fighting in the Middle East are all factors in the rising costs these days.
- Energy stocks have generally outperformed the broader stock market in recent months, buoyed by oil prices that were already at the $90-a-barrel mark. If oil keeps doing this, energy stocks could have an even better 2011.
- Oil bulls believe that the current boom in the oil industry may continue into the next decade as high oil and gas prices create greater demand for offshore production. Transocean (NYSE: RIG) CEO Bob Long recently stated that they are “comfortable that…oil prices down to $40 a barrel and maybe even down to $35 would have little or no impact on the deepwater market.”