ETF Chart of the Day: Base Metals
January 23rd, 2012 at 1:23pm by Paul Weisbruch, Street One Financial
Exchange traded funds that invest in industrial metals have rallied in early 2012 and on Friday we saw significant trading volume in PowerShares DB Base Metals (DBB).
We also noticed call buying in typically inactive DBB options. The product is an exchange traded note that grants exposure to the industrial metals segment via futures contracts in aluminum, copper, and zinc.
It is not terribly unsurprising to see some upside action in this segment of the market as precious metals as well as industrial metals have been on an impressive run over the past two weeks. For example, copper alone has rallied nearly 10% year to date and it is up 15.20% in the past three months. [Copper ETFs Test 200-Day Average as Speculators Turn Bullish]
We point out that DBB is up 9.54% year to date but is down 13.43% in the trailing one year period so there is clearly some work to be done in terms of reclaiming old highs in the ETN.
Other ETFs/ETNs that cover the diversified base/industrial metals space that will likely be in play in the near term include iPath DJ Industrial Metals ETN (JJM), PowerShares DB Base Metals Double Long ETN (BDD), PowerShares DB Base Metals Short ETN (BOS), PowerShares DB Base Metals Double Short ETN (BOM), E-TRACS CMCI Industrial Metals ETN (UBM), PowerShares DB Base Metals Long ETN (BDG) and iPath Pure Beta Industrial Metals (HEVY).
PowerShares DB Base Metals