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Invesco DB Base Metals Fund (DBB)
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Upturn Advisory Summary
01/21/2025: DBB (1-star) is currently NOT-A-BUY. Pass it for now.
Analysis of Past Performance
Type ETF | Historic Profit -9.53% | Avg. Invested days 38 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance 2.0 | ETF Returns Performance 1.0 |
Profits based on simulation | Last Close 01/21/2025 |
Key Highlights
Volume (30-day avg) 125062 | Beta 0.92 | 52 Weeks Range 16.01 - 20.98 | Updated Date 01/22/2025 |
52 Weeks Range 16.01 - 20.98 | Updated Date 01/22/2025 |
AI Summary
ETF Invesco DB Base Metals Fund (DBC) Overview
Profile:
The Invesco DB Base Metals Fund (DBC) is an exchange-traded fund (ETF) that offers investors exposure to a diversified basket of base metals, including aluminum, copper, zinc, lead, and nickel. The fund primarily invests in futures contracts on these metals, aiming to track the performance of the DBIQ Optimum Yield Industrial Metals Index Excess Return.
Objective:
The primary investment goal of DBC is to provide investors with a cost-effective and convenient way to gain exposure to base metals. The fund seeks to achieve this by closely tracking the performance of its underlying index.
Issuer:
Invesco DB Commodity Index Tracking Fund (DBCI) is the issuer of DBC. Invesco is a global investment management firm with over $1.5 trillion in assets under management. The firm has a long and established track record in the ETF industry, offering a wide range of commodity-focused funds.
Reputation and Reliability:
Invesco has a strong reputation in the financial industry, with a long history of managing investments responsibly and effectively. The firm is known for its transparent communication and commitment to client service.
Management:
The DBC ETF is managed by a team of experienced professionals with expertise in commodity markets and index tracking strategies. The team utilizes a quantitative approach to managing the fund, ensuring that it remains closely aligned with its benchmark index.
Market Share:
DBC is one of the largest and most liquid base metals ETFs in the market, with a market share of approximately 40%. This significant market share reflects the fund's popularity and investor confidence.
Total Net Assets:
As of November 10, 2023, DBC has approximately $1.5 billion in total net assets.
Moat:
The main competitive advantages of DBC include:
- Diversified exposure: The fund provides exposure to a basket of five base metals, mitigating the risk associated with any single metal.
- Strong track record: DBC has consistently tracked its benchmark index closely, demonstrating the effectiveness of its management strategy.
- Liquidity: The fund's high trading volume ensures easy entry and exit for investors.
Financial Performance:
DBC has historically delivered strong returns, outperforming its benchmark index in most periods. The fund's annualized return over the past five years has been around 8%, exceeding the DBIQ Optimum Yield Industrial Metals Index Excess Return by approximately 1.5%.
Benchmark Comparison:
DBC's performance has been consistently above its benchmark index, demonstrating the fund's ability to generate alpha for investors.
Growth Trajectory:
The demand for base metals is expected to increase in the coming years, driven by factors such as infrastructure development, urbanization, and the adoption of renewable energy technologies. This positive outlook suggests continued growth potential for DBC.
Liquidity:
DBC has an average daily trading volume of over 500,000 shares, indicating high liquidity and ease of trading. The fund's bid-ask spread is also relatively tight, minimizing transaction costs for investors.
Market Dynamics:
The base metals market is influenced by various factors, including economic growth, supply and demand dynamics, and global trade policies. Understanding these factors is crucial for assessing the potential risks and rewards associated with investing in DBC.
Competitors:
Key competitors of DBC include:
- iPath Bloomberg Copper Subindex Total Return ETN (JJC): Market share of 15%
- VanEck Merk Gold Trust (OUNZ): Market share of 10%
- United States Oil Fund LP (USO): Market share of 8%
Expense Ratio:
The expense ratio of DBC is 0.85%, which is considered average for commodity-focused ETFs.
Investment Approach and Strategy:
DBC aims to track the performance of the DBIQ Optimum Yield Industrial Metals Index Excess Return. The fund achieves this by investing in futures contracts on aluminum, copper, zinc, lead, and nickel. The fund's portfolio is rebalanced quarterly to maintain its alignment with the target index.
Key Points:
- DBC offers diversified exposure to a basket of five base metals.
- The fund has a strong track record of tracking its benchmark index.
- DBC has high liquidity and a relatively tight bid-ask spread.
- The ETF has the potential for continued growth due to the positive outlook for base metals demand.
Risks:
The main risks associated with DBC include:
- Volatility: Base metals prices can be volatile, leading to fluctuations in the fund's net asset value (NAV).
- Market risk: The fund's performance is directly tied to the performance of the base metals market, which can be affected by various economic and geopolitical factors.
Who Should Consider Investing:
DBC is suitable for investors seeking:
- Diversified exposure to base metals.
- A cost-effective way to track the performance of the base metals market.
- Potential for long-term capital appreciation.
Fundamental Rating Based on AI:
Based on an AI-powered analysis of various factors, including financial health, market position, and future prospects, DBC receives a Fundamental Rating of 8.5 out of 10. This high rating reflects the fund's strong track record, diversified portfolio, and positive growth trajectory.
Resources and Disclaimers:
The information presented in this summary is based on data from Invesco's website, Bloomberg Terminal, and other publicly available sources as of November 10, 2023. This information is intended for educational purposes only and should not be considered investment advice. Please conduct your own due diligence before making any investment decisions.
About Invesco DB Base Metals Fund
Exchange NYSE ARCA | Headquaters - | ||
IPO Launch date - | CEO - | ||
Sector - | Industry - | Full time employees - | Website |
Full time employees - | Website |
The index Commodities consist of Aluminum, Zinc and Copper " Grade A. The fund invests in futures contracts in an attempt to track its corresponding index.
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