This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Your Path to Precious Commodities

One thing that has been clear about ETFs is that new product innovation will allow individual investors to access parts of the market that had not been easily available. The folks at PowerShares, in conjunction with Deutsche Bank, have rolled out a couple of products so far, and on Friday they rolled out seven new commodities-based ETFs.

Here are the seven:

  • PowerShares DB Agriculture Fund (DBA)
  • PowerShares DB Base Metals Fund (DBB)
  • PowerShares DB Energy Fund (DBE)
  • PowerShares DB Oil Fund (DBO)
  • PowerShares DB Precious Metals Fund (DBP)
  • PowerShares DB Silver Fund (DBS)
  • PowerShares DB Gold Fund (DGL)

As evidenced by the names, some of the funds (Oil, Silver and Gold) invest in single commodities, and those charge a 0.50% expense fee. Some are multi-commodity funds (Agriculture, Base Metals, Energy and Precious Metals) and charge a 0.75% fee. The various funds will use futures contracts to create the exposure. All of the funds employ something called the optimum yield formula, which is an attempt to minimize the consequence of price distortions caused by rolling to new futures contracts, known as contango , as current ones expire.

Chances are you have heard the virtues of the diversity that comes with commodity exposure. This is true, and according to information about the funds from Deutsche Bank, the track records of the underlying indices all have very low correlations to the S&P 500.

This is an important point. The stock market has an up year the vast majority of the time. If you are buying something you expect will have a low correlation to stocks, you need to be prepared for the possibility that the commodity fund you buy may not go up very often, or more likely will not go up as much as stocks might, over the longer term.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DBS $22.58 0.51%
DBO $10.82 -0.09%
DBP $32.78 -0.32%
DBB $11.57 -0.60%
DBE $13.05 0.00%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs