ETF Spotlight on PowerShares DB Precious Metals Fund (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.