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UBS ETRACS DJ-UBS Commodity Index Total Return ETN (DJCI)

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  • Fri, Jul. 31, 8:13 AM
    • In an effort to increase its influence on global commodity prices, China will allow outside traders to transfer foreign currency or yuan funds into China to trade on its commodity futures markets, signifying a major reform for the world's top consumer of many raw materials.
    • Currently, foreigners have very limited access to China's commodities markets. Companies are only allowed to trade via brokers after establishing a locally registered non-financial unit, which is expensive.
    • Starting August 1, trading or brokerage firms can open special accounts in designated Chinese banks. The funds must be used for trading only.
    • The China Securities Regulatory Commission says that the Shanghai Futures Exchange's crude oil futures will be the first contract available for trading by foreigners. They may also apply for a direct trading license with the exchange. No information on the timing of access to additional futures contracts is available.
    • ETFs: DBC, DJP, GSG, CHIX, RJI, GCC, USCI, GSP, GSC, CHIM, DJCI, DEE, LSC, CMD, UCI, DYY, FTGC, DDP, BCM, UCD, COMT, CMDT, SBV, DPU, PDBC, CSCB, CSCR
    | 18 Comments
  • Mon, Jul. 20, 8:02 AM
    | 1 Comment
  • Tue, Mar. 17, 8:10 AM
    • "China’s economic transition and the inability of other emerging markets to pick up the slack are driving slower demand growth across the commodities complex,” says the team at Citi. "The extent of slowdown is likely to vary by commodity.”
    • Hardest hit, says Citi, will be bulk commodities like coal, iron ore, and steel thanks to their exposure to China's manufacturing, infrastructure, and property sectors.
    • Oil consumption growth in China and the "Emerging 5" - India, Southeast Asia, the Middle East, Latin America, and Africa - will be 2.7% from 2014-2020, and 2.3% from 2020-2025 vs. 4% from 2001-2011.
    • The upside from China no longer being as dominant: “Global demand as a whole should become less cyclical as a downturn in one key economy has a lesser impact on overall demand."
    • ETFs: DBC, DJP, GSG, RJI, GCC, USCI, GSC, GSP, RGRC, DJCI, LSC, DEE, UCI, FTGC, CMD, DYY, BCM, DDP, UCD, CMDT, COMT, DPU, SBV, CSCB, PDBC, CSCR
    | Comment!
  • Wed, Jan. 28, 2:57 PM
    • “Despite the large declines in commodity prices, we see risks as still skewed to the downside over the near-term,” says Goldman Sachs.
    • Of course, much of the price decline has to do with oil, and Goldman doesn't expect a whole lot more damage as prices have gotten low enough for investors to begin buying excess supplies and putting them in storage. While this may put a floor under the price, says Goldman, it also means prices are likely to stay lower for longer.
    • Meanwhile, there's China, and slowing growth there means copper (NYSEARCA:JJC) prices have further to fall. Some metals to consider going long? Palladium (NYSEARCA:PALL), nickel (JJN, NINI), and zinc.
    • ETFs: DJP, GSG, RJI, GSC, GSP, DJCI, CMD, UCD
    | 1 Comment
  • Fri, Jan. 2, 9:27 AM
    | 2 Comments
  • Dec. 31, 2014, 2:17 PM
    • A tough year for commodity prices continues all the way into the close of the last session, with precious metals, energy, grains, and most of the softs slumping sharply. 2014's big commodity winner, naturally, stands alone in the green today - coffee is up 2%.
    • The PowerShares DB Commodity Index Tracker (DBC -1.9%)
    • Alongside the commodity slump, both this year and this session, is a stronger dollar, set to close 2014 out at its highest level in at least five years.
    • ETFs: DBC, DJP, GSG, RJI, GCC, USCI, GSC, GSP, RGRC, DJCI, LSC, DEE, UCI, FTGC, CMD, DYY, BCM, DDP, UCD, CMDT, COMT, DPU, SBV, CSCB, PDBC, CSCR
    | 1 Comment
  • Dec. 22, 2014, 11:47 AM
    | 4 Comments
  • Nov. 10, 2014, 2:25 PM
    • The PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio (NASDAQ:PDBC) offers broad commodity futures contracts through a Cayman Islands-based unit, which allows its investors to avoid K-1 tax forms.
    • This is a key feature to the fund; K-1 forms can be a burden for investors as they potentially delay filings and may require investors to report and pay taxes on gains annually, even if the security has not been sold.
    • "PDBC provides broad and efficient exposure to commodities with the added benefit of eliminating Scheduled K-1 requirements," said Lorraine Wang, Invesco PowerShares Head of Global ETF Products & Research, in a press release.
    • This is the 4th actively managed ETF from Invesco (NYSE:IVZ), which now offers 165 funds for investors.
    • Other broad commodity ETFs: DBC, DJP, GSG, RJI, GCC, USCI, GSP, GSC, RGRC, DJCI, LSC, DEE, FTGC, UCI, CMD, DYY, BCM, DDP, UCD, CMDT, SBV, DPU, COMT, CSCB, CSCR
    | Comment!
  • Nov. 1, 2014, 10:15 AM
    • With most asset classes at or near record levels, no one seems to want commodities - oil is at just $80 per barrel, gold just took out a multi-year low, and corn is off more than 50% from its 2012 high. Contrarians may want to take a look, writes Andrew Bary in Barron's, noting commodity markets tend to be self-correcting - lower prices cool production and stimulate demand.
    • Low rates help too: The opportunity cost of holding commodities, and the price of rolling forward contracts is reduced.
    • Bary also reminds that much of the institutional money which was in love with commodities in 2008 (with oil at $140 per barrel) has exited. The Harvard endowment, for instance, has scaled back its commodity exposure to zero from 8% six years ago.
    • Another sign of the times: Fidelity cut direct commodity exposure in its Freedom target-date mutual funds last year, with the Fidelity Freedom 2030 fund (MUTF:FFFEX) dropping its commodity weighting to 1.2% from 7.5%.
    • Board commodity ETFs: DBC, DJP, GSG, RJI, GCC, USCI, GSP, GSC, RGRC, DJCI, LSC, DEE, FTGC, UCI, CMD, DYY, BCM, DDP, UCD, CMDT, SBV, DPU, CSCB, COMT, CSCR
    | 14 Comments
  • Oct. 16, 2014, 2:56 PM
    | Comment!
  • Oct. 6, 2014, 3:49 PM
    | 2 Comments
  • Sep. 30, 2014, 12:07 PM
    | 10 Comments
  • Apr. 29, 2014, 7:15 PM
    | 5 Comments
  • Mar. 14, 2014, 3:48 PM
    • US Steel (X -1.3%) is downgraded to Underperform from Neutral at Credit Suisse due to relative valuation and expected lower iron ore pricing in H2 2014.
    • Equity prices, and particularly US Steel, seem to be overlooking recent commodity price weakness as a short-term destock related phenomenon - perhaps not surprising given the 2012 collapse and rebound in iron ore prices - but Credit Suisse believes that, unlike 2012, structural changes to the global ferrous supply/demand balance through mid-year will see commodity prices settle at a lower level in H2 than they did after the 2012 destock shock.
    • Also, the firm thinks US Steel's relative outperformance vs. international peers including ArcelorMittal (AT) likely is due to EM/DM exposure trade, but the gap will close at some point.
    • ETFs: DBC, DJP, GSG, RJI, GCC, USCI, CFD, CTF, RGRC, GSP, GSC, LSC, DEE, DJCI, UCI, CMD, DDP, DYY, BCM, UCD, FTGC, CMDT, SBV, DPU, CSCB, CSCR
    | 3 Comments
  • Feb. 4, 2014, 10:06 AM
    • After losing 10% in 2013 while the MSCI World Index of stocks gained 24%, the Dow Jones-UBS Commodity Index made up some ground in January, eking out a small advance while the MSCI index slid 3.7%.
    • But as rallies go, it was a pretty lame one. The DJ-UBS index's biggest weighting is for natural gas at nearly 14.5%, and gas futures surged 18% amid the coldest January in memory. Spring will come soon though, and then what?
    • Second in the index weighting is gold which gained 3% in January - not the greatest bounce considering a 29% dive in 2013.
    • Commodities tied more closely to global economic activity - oil and industrial metals - make up 42% of the sector's weighting and they were pretty much uniformly in the red.
    • Broad commodity ETFs: DBC, DJP, GSG, RJI, GCC, USCI, CFD, CTF, RGRC, GSC, LSC, GSP, DEE, DJCI, DYY, DDP, BCM, CMD, UCI, UCD, CMDT, SBV, DPU, FTGC, CSCB, CSCR
    | 1 Comment
  • Dec. 31, 2013, 1:21 PM
    • Nearly 8 years after the launch of the PowerShares DB Commodity Tracking Fund (DBC), the firm filed paperwork for an actively managed version of the fund, offering exposure to a diversified set of commodities through futures contracts.
    • By investing in 14 heavily traded sectors of the commodity market, this fund hopes to hedge against individual sector falls, creating consistent return for investors.
    • DBC is down about 7.5% this year as equities stole the spotlight in 2013, but with $5.5 billion in assets under management it has considerable stability and did exceedingly well in years where equities fell.
    • Other broad commodity ETFs: DJP, GSG, RJI, GCC, USCI, CFD, CTF, RGRC, GSC, LSC, GSP, DEE, DDP, DYY, DJCI, CMD, BCM, UCI, UCD, SBV, CMDT, DPU, FTGC, CSCR, CSCB
    | Comment!
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DJCI Description
The UBS ETRACS DJ-UBS Commodity Index Total Return is designed to track the performance of the DJ-UBS Commodity Index Total ReturnSM less investor fees. The DJ-UBS Commodity Index Total ReturnSM is designed to provide diversified commodity exposure with weightings based on each underlying commodity's liquidity and economic significance. The DJ-UBS Commodity Index Total ReturnSM measures the collateralized returns from a basket of 19 commodity futures contracts representing the energy, precious metals, industrial metals, grains, softs and livestock sectors. In addition, the index is rebalanced once a year to ensure that no commodity sector may constitute more than 33% of the index as of the date of such rebalancing.
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