When it comes to investing in metals, it is the precious variety, namely gold and silver, that command the most attention among investors and the financial precious.
Indeed, gold and silver have enjoyed runs of success at various points this year, but some industrial metals are leading the way as 2016 draws to a close.
Just look at the PowerShares DB Base Metals (NYSEArca: DBB), which is up more than 29.2% year-to-date. Industrial metals like copper, nickel, iron and steel have all rebounded in recent months as traders bet on improving global economic conditions would bolster demand for the base metals after prices hit multi-year lows.
DBB’s year-to-date performance exceeds those of the largest gold and silver exchange traded products combined.
The ETF is “designed for investors who want a cost-effective and convenient way to invest in commodity futures. The Index is a rules-based index composed of futures contracts on some of the most liquid and widely used base metals — aluminum, zinc and copper (grade A). You cannot invest directly in the Index,” according to PowerShares.
Copper prices are benefiting as investors anticipate greater demand out of China and increased infrastructure projects under president-elect Donald Trump. Some professional traders are reacting by increasing bullish bets on the red metal. Copper currently accounts for 34% of DBB’s weight.