Seeking Alpha
, ETF Trends (312 clicks)
ETF investing
Profile| Send Message|
( followers)  

ETF Spotlight on PowerShares DB Precious Metals Fund (NYSEARCA:DBP), part of an ongoing series on exchange traded funds.

Assets: $658.9 million.

Objective: The ETF tries to reflect the DBIQ Optimum Yield Precious Metals Index Excess Return, which is comprised of futures contracts on gold and silver.

Holdings: Holdings will change based on changes in the underlying futures prices. The fund will hold a base weighting of 80% in gold and 20% in silver.

What You Should Know:

  • Invesco PowerShares sponsors the ETF.
  • DBP has an expense ratio of 0.75%.
  • The fund has risen 11.05% over the past month, 17.21% over the last 3-months and 28.56% year-to-date.
  • The fund follows the Optimum Yield version of the underlying index, which tries to diminish the effects of “negative roll yield.”
  • The index replaces expiring futures contracts, or rolls them over, with new contracts that expire in the month that will generate the highest “implied roll yield.”
  • By targeting the month with the highest implied roll yield, the fund is able to minimize the negative effects of “contango.”

The Latest News:

  • Gold futures rose as high as $1,884.60 an ounce during intraday trading on Friday after the disappointing August employment data, reports Matt Day for The Wall Street Journal.
  • Gold has also been gaining on the prospects that European and U.S. Central Banks will maintain their loose monetary policies.
  • “We’ve got poor economic data, you’ve got sovereign debt issues here and in Europe,” remarked Matt Zeman, head of trading with Kingsview Financial. “I can’t come up with a lot of reasons why gold wouldn’t continue to work higher.”

PowerShares DB Precious Metals Fund (DBP)

click to enlarge

Max Chen contributed to this article.

Disclosure: None

Source: Spotlight On PowerShares DB Precious Metals ETF