A Better Mousetrap for Gold

DGL charges 0.54%. If it averages 4.5% in interest, investors might expect a yield of about 3.95%. To be clear, interest rates can change, so a payout is not guaranteed. But if management can demonstrate the ability to track GLD and IAU, that plus the opportunity for interest income are the strong points here. DGL is still brand-new, so it needs to prove that Optimum Yield will work, but there is visibility for this to be the better mousetrap than the current gold ETFs.

This potential outperformance also exists in the silver market between iShares Silver Trust(SLV) and the PowerShares Silver ETF(DBS). The dynamics that move these two ETFs are a little different, but their mechanics are similar. So anyone interested in the silver market should study DBS as well as SLV.

Last is the oil market, which I referred to above. Deutsche Bank also has a crude oil ETF: PowerShares DB Oil(DBO). The existing products have caused some surprises because of contango. If -- and it's still a big if -- Optimum Yield can solve this problem for the oil market in DBO, investors looking to play this market should consider DBO over the other oil ETFs, after it proves itself out.

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Please note that due to factors including low market capitalization and/or insufficient public float, we consider PowerShares DB Gold, PowerShares Silver ETF and PowerShares DB Oil to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

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