Interesting New Issue

mrbaseball · #1 02-06-2006, 10:24 AM

Symbol DBC (amex). It's a Deutsche Bank Commodity Index based on Crude, Heating Oil, Gold, Aluminium, Corn and Wheat. It just started trading on Friday. Nice inflation hedge perhaps that can be directly played via the stock market without the need to dirty yourself with commodity trading. I'm unclear right now about the weighting but it looks interesting, I plan to research a bit more. If anyone has any info I'd like to hear what you know.

BarkingMad · #2 02-06-2006, 03:14 PM

Thanks for posting this.

For a while now, the Rogers Raw Material Fund has been the only real option of this type.

As the bull market in commodities continues to run, I think there will be more ETF's like this offered. But for now, this is just about it.

Here is a link that talks about the weightings.

Reuters link

Thanks again.

mrbaseball · #3 02-06-2006, 04:05 PM

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Thanks. I have been digging through the prospectus (downloadable at Amex website) trying to get familiar with it and try to figure any arbitrage angles I can.

laserboy · #4 02-06-2006, 09:23 PM

This is the first ETF product that uses the collateralized commodity future approach, but there are actually several index funds that use essentially the same approach. Oppenheimer offers one based on the Goldman-Sachs Commodity Index (QRAYX), Pimco offers one based on the Dow Jones-AIG Commodity Index (PCRIX), and the Rogers Raw Materials Fund offers one based on the Rogers International Commodity Index.

The Rogers Raw Materials Fund has extremely high managements fees. They were also involved in a dispute trying to get their assets back from Refco the last time I looked. The Oppenheimer Fund is heavily overweight in hydrocarbons which would not necessarily have been a bad thing the past few years. While the Pimco fund had the lowest management fees of the three.

From a cursory glance, the the DB ETF seems to be extremely limited in scope owning a total of only six commodities. That somewhat defeats the purpose of owning a diversified index fund in my opinion.

Here are a couple links on the funds and the indices that they track:

Going Long on Commodities: Six ways to invest in commodities

Commodity Indexes Overview and Analysis