PowerShares DB Energy Fund
Quotes, News and Charts for PowerShares DB Energy Fund - DBE:
Ticker Symbol: DBE
Profile for PowerShares DB Energy Fund:
This fund invests in the energy futures contracts: light sweet crude oil , heating oil, Brent crude oil, RBOB gasoline and natural gas. This fund is one of the most rounded investments in the energy commodities.
Investment Objective of the Fund:
This fund invests in the energy commodities.
It invests in futures contracts of WTI crude oil, Brent crude oil, natural gas, heating oil and RBOB unleaded gas. This is probably the most diversified you can get in the energy sector with a commodity ETF.
The management fee on the fund is about 0.78%. This is better than a mutual fund and certainly better than managed futures. The fund has about $180 million under management, as of August 2012. Even though the fund invests in futures contracts, they are still considered unleveraged. This is because they set aside the whole contract value in cash for every contract they purchase. This means you cannot lose more than you invest in this fund.
One of the drawbacks of a fund like this is that they only invest in the long side of the commodities. The fund does not short any commodities and investors only benefit if the price of the commodities move higher. The fund basically trades like a stock and there are options available on the fund. This presents some opportunities to bet on the price moving lower, but the options are illiquid.
The fund invests only in energy commodities and they all typically move in the same direction. That is the normal case, but they are far from a perfect correlation. Natural gas doesn't necessarily move with crude oil on a daily basis. There are other factors that affect the price of natural gas. With the advent of more efficient drilling techniques like fracking, natural gas supplies increased rapidly in recent years. This has caused the price of natural gas to plummet, while crude oil prices have remained strong.
Supply and demand dynamics will likely change in the years to come. Natural gas might be the strong market and crude oil could be the weak market. Some of the energy commodities can also have larger percentage moves over a period of time. For instance, demand for gasoline could be very strong and the prices rise, while the price of heating oil stagnates from the excess supplies produced during the refining process.
Overall, this fund makes sense for an investor who believes energy prices will move higher. The fund is fairly diversified among energy futures contracts. The expense ratio is fairly low and this makes holding the fund for a long-term investment very reasonable.
Ticker Symbol: DBE
Profile for PowerShares DB Energy Fund:
This fund invests in the energy futures contracts: light sweet crude oil , heating oil, Brent crude oil, RBOB gasoline and natural gas. This fund is one of the most rounded investments in the energy commodities.
Investment Objective of the Fund:
This fund invests in the energy commodities.
It invests in futures contracts of WTI crude oil, Brent crude oil, natural gas, heating oil and RBOB unleaded gas. This is probably the most diversified you can get in the energy sector with a commodity ETF.
The management fee on the fund is about 0.78%. This is better than a mutual fund and certainly better than managed futures. The fund has about $180 million under management, as of August 2012. Even though the fund invests in futures contracts, they are still considered unleveraged. This is because they set aside the whole contract value in cash for every contract they purchase. This means you cannot lose more than you invest in this fund.
One of the drawbacks of a fund like this is that they only invest in the long side of the commodities. The fund does not short any commodities and investors only benefit if the price of the commodities move higher. The fund basically trades like a stock and there are options available on the fund. This presents some opportunities to bet on the price moving lower, but the options are illiquid.
The fund invests only in energy commodities and they all typically move in the same direction. That is the normal case, but they are far from a perfect correlation. Natural gas doesn't necessarily move with crude oil on a daily basis. There are other factors that affect the price of natural gas. With the advent of more efficient drilling techniques like fracking, natural gas supplies increased rapidly in recent years. This has caused the price of natural gas to plummet, while crude oil prices have remained strong.
Supply and demand dynamics will likely change in the years to come. Natural gas might be the strong market and crude oil could be the weak market. Some of the energy commodities can also have larger percentage moves over a period of time. For instance, demand for gasoline could be very strong and the prices rise, while the price of heating oil stagnates from the excess supplies produced during the refining process.
Overall, this fund makes sense for an investor who believes energy prices will move higher. The fund is fairly diversified among energy futures contracts. The expense ratio is fairly low and this makes holding the fund for a long-term investment very reasonable.
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