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Invesco DB Base Metals Fund (ARCA:DBB), 空売り情報

Basic Materials

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.

Invesco Government & Agency Portfolio, Institutional Class

Invesco Treasury Collateral ETF

Invesco DB Base Metals Fund

The re-election of Donald Trump <a href="https://www.benzinga.com/markets/commodities">has metals markets</a> looking a little like a shaken-up snow globe—chaotic and swirling. 
While some metals might be facing a rocky road, JPMorgan's Commodities Research team, led by Greg Shearer, sees gold as holding strong through the turbulence, calling recent gold action a "stumble not a sea change."
Here's the JPMorgan breakdown on what to watch in metals as this political shift unfolds.
<h2 class="wp-block-heading">"Timing and Sequencing Will Be Critical" For Base Metals</h2>
As tariff tensions escalate, Peterson and his team emphasize that "policy timing and sequencing will be critical." They anticipate that China's response will likely be "a more reactive mechanism" once tariffs are in place, rather than a proactive approach. In practical terms, this suggests that the market may start to factor in "risk premia" in the weeks ahead.
Traders should buckle up as base metals brace for near-term turbulence, holding off for now on any major plays.
Investors in base metal ETFs such as the United States Copper Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CPER#NYSE">CPER</a>) and the Invesco DB Base Metals Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBB#NYSE">DBB</a>) should remain wary of their holdings.
The analysts say one metal could break the trend, though: aluminum. With supply issues dogging the bauxite market, aluminum has an "idiosyncratic fundamental support" that could "significantly mitigate bearishness from a weaker CNY." So, while aluminum may stay relatively resilient, other base metals might be taking a temporary backseat.
Read Also: <a href="https://www.benzinga.com/markets/commodities/24/11/41793159/trumps-victory-a-tailwind-for-domestic-steel-risk-for-canada-say-analysts">Trump&#8217;s Victory A Tailwind For Domestic Steel, Risk For Canada, Say Analysts</a>
<h2 class="wp-block-heading">Gold: The "Debasement Trade" Keeps The Glitter</h2>
Gold experienced a dip following the election, but JPMorgan sees this as a temporary setback rather than a major shift. With potential U.S. fiscal challenges and rising inflation concerns, Peterson anticipates gold will perform strongly in the coming years, projecting it could reach $2,850 per ounce by late 2025.
This "debasement trade" may make gold the go-to hedge as the new administration's policies take shape, especially as inflationary pressures bubble up.
This may bode well for investors in the SPDR Gold Shares ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) and the iShares Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAU#NYSE">IAU</a>).
<h2 class="wp-block-heading">The Yuan Factor: Copper's Achilles' Heel?</h2>
Another key factor here is the yuan (CNY). If Trump's policies lead to further yuan depreciation—potentially up to 7.40 or even 7.8, according to JPMorgan's FX strategists—copper prices could see a roughly 5% hit, dragging prices down to around $9,000 per metric ton.
Aluminum, again, may be shielded somewhat by those supply issues, but other base metals could be feeling the squeeze.
<h2 class="wp-block-heading">Gold Glimmers While Base Metals Hold Their Breath</h2>
For the metals market, Trump's second term brings headwinds and a few golden highlights. 
While base metals might see some strategic waiting time, aluminum could be one of the few to withstand the early hits. 
Gold, meanwhile, has the long game in sight, with JPMorgan's "debasement trade" fueling bullish forecasts.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/markets/cryptocurrency/24/11/41810728/jpmorgan-predicts-strong-performance-for-bitcoin-and-gold-under-trump-presidency">JPMorgan Predicts Strong Performance For Bitcoin And Gold Under Trump Presidency</a></li>
</ul>
Photo: Shutterstock

Analyst Color

Long Ideas

Specialty ETFs

Commodities

Markets

Analyst Ratings

Trading Ideas

ETFs

CPER

Trump Re-Election Jolts Metals Market As Gold Sees A 'Stumble, Not A Sea Change'

There is such a slew of conflicting indicators and commentary on the economy swirling around these days that it may be hard to get a grip on how the consumer is doing.
Walmart Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>), the world&#8217;s largest retailer, beat <a href="https://www.benzinga.com/news/earnings/24/08/40415005/these-analysts-boost-their-forecasts-on-walmart-after-upbeat-earnings">Wall Street forecasts</a> for second-quarter profits and sales as it posted $4.5 billion in net profit, down from $7.89 billion a year ago, and $169 million in revenue, up from $162 million in revenue a year earlier.
It also raised its full-year outlook by forecasting revenue to increase from 3.75% to 4.75%, up from previous guidance of a 3% to 4% rise in revenue, and adjusted earnings to range from $2.35 and $2.43 per share, up from prior expectations between 3% and 4%, CNBC <a href="https://www.cnbc.com/2024/08/15/walmart-reports-its-earnings-before-the-bell-heres-what-to-expect.html">reported</a>.
During Thursday&#8217;s earnings call, CFO John David Rainey said consumers are spending money, but economic indicators are still prompting the retail giant to proceed carefully.
&#8220;While we have not seen any additional fraying of consumer health in our business, other economic data out there, as well as the state of affairs globally, would suggest that it&#8217;s prudent to remain appropriately cautious with our outlook,&#8221; he said.
Read Next: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/08/40420968/walmart-stock-one-of-the-most-compelling-retail-investments-7-analysts-highlight-ma">Walmart Stock &#8216;One Of The Most Compelling&#8217; Retail Investments: 7 Analysts Highlight Market Share Gains</a>
Two days earlier, fellow retail giant Home Depot Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HD#NYSE">HD</a>) cut its sales outlook for 2024, saying it expects a 3% to 4% decline in comparable sales versus the 1% dip that it forecasted previously as it sees consumers holding back on spending due to elevated interest rates.
&#8220;There&#8217;s just a lot of noise with political and geopolitical environment, unemployment ticked up, inflation keeps eating away at disposable income,&#8221; CEO Ted Decker said during Tuesday&#8217;s earnings call.
&#8220;And I think people just took a pause as we progress through the quarter or more of a pause because of these macro uncertainties.&#8221;
Home Depot posted a $4.7 billion profit for the second quarter, up from $4.6 billion a year ago. Revenue came in at $43.2 billion, up 0.6% from a year earlier, while comparable sales fell 3.3% year over year.
Meanwhile, retail sales in the <a href="https://www.benzinga.com/economics/macro-economic-events/24/08/40393687/retail-sales-soar-in-july-weekly-jobless-claims-undercut-expectations-traders-lea">U.S. grew 1%</a> month over month and 2.7% year over year in July, according to Thursday&#8217;s report from the Department of Labor, but credit-card delinquencies rose $27 billion during the second quarter to a record $1.14 trillion, <a href="https://www.newyorkfed.org/newsevents/news/research/2024/20240806">according </a>to an Aug. 6 report from the Federal Bank of New York.
While higher retail sales, though getting funded by credit cards, may indicate that consumers are doing okay, falling commodity prices suggest otherwise, CNBC <a href="https://www.cnbc.com/2024/08/12/falling-commodity-prices-are-indicating-there-is-trouble-brewing-with-the-economy.html">reported</a>.
The&nbsp;Invesco DB Base Metals Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBB#NYSE">DBB</a>) is down more than 7% over the past month, while&nbsp;crude oil futures dropped 14% from July 5 through Aug. 5.
"In terms of commodities, the entire asset class is coming under pressure," Rob Ginsberg, managing director at Wolfe Research, told clients in a note.
"We see this broad decline in commodity prices as yet another warning about the state of the economy."
And while retail sales showed an upswing, the Department of Labor&#8217;s <a href="https://www.benzinga.com/economics/macro-economic-events/24/08/40129796/job-creation-tumbles-in-july-higher-unemployment-strengthens-case-for-interest-ra">July jobs report </a>showed unemployment rose 0.2% from June to 4.3%.
Read Next: • <a href="https://www.benzinga.com/24/08/40381559/home-depot-ceo-says-inflation-keeps-eating-away-at-disposable-income-are-home-repairs-being-put-off">Home Depot CEO Says &#8216;Inflation Keeps Eating Away At Disposable Income&#8217;: Are Home Repairs Being Put Off Due To The Economy?</a>
Photo: Shutterstock

Economics

Walmart Surges, Home Depot Stumbles: Retail Giants Navigate Conflicted Economy

Producer Price Index (PPI) inflation data for May, to be released on Wednesday, June 14, will set the stage for the highly anticipated Federal Reserve meeting where <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/23/06/32833950/surprise-dip-in-may-inflation-raises-hopes-for-pause-in-fed-rate-hikes" target="_blank" rel="noreferrer noopener">interest rates will be determined.</a>
The market&#8217;s expectations of the Fed&#8217;s rate hikes coming to an end were solidified after Tuesday&#8217;s CPI report revealed a lower-than-expected decline in consumer inflation. 
The upcoming producer inflation data could provide additional evidence of a disinflationary trend, potentially swaying Fed members to reconsider the need for future interest rate increases.
<h2 class="wp-block-heading">Producer Price Inflation Preview: What Do Economists Expect?</h2>
<ul>
<li>Economists forecast that producer inflation in the U.S. could decrease to as low as 1.5% in May, down from April&#8217;s 2.3%, marking the lowest level since January 2021. This would extend the streak of 12 consecutive declines in producer price inflation.</li>
<li>Producer prices are also projected to fall significantly below their 10-year average of 2.7%.</li>
<li>Monthly estimates show a 0.1% reduction in producer prices, the second negative reading&nbsp;in 2023.</li>
<li>Core PPI, excluding energy and food, is predicted to fall from 3.2% in April to 2.9% in May, its lowest level since March 2021. The monthly core PPI is expected to stay unchanged at 0.2%.</li>
<li>Food (down 0.5%) and transportation and warehousing (down 1.7%) subindices experienced monthly contractions in April, with the latter seeing four consecutive months of decrease.</li>
</ul>
Chart: PPI Inflation Is Falling Off A Cliff 
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="819" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6-1024x819.png" alt="" class="wp-image-51373" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6-1024x819.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6-300x240.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6-768x614.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6.png 1468w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Read Now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/06/32838442/energy-driven-cpi-drop-in-may-contrasts-with-persistent-core-cpi-5-economists-specu" target="_blank" rel="noreferrer noopener">Energy-Driven CPI Drop In May Contrasts With Persistent Core CPI: 5 Economists Speculate On Fed&#8217;s Next Move</a>
<h2 class="wp-block-heading">Commodity Prices Tumbled in May, Putting Additional Downside&nbsp;Pressure To PPI: 5 Commodity ETFs To Watch</h2>
Global commodities prices fell across the board in May, as COVID-19-related supply chain disruption further&nbsp;vanished&nbsp;and China&#8217;s economic recovery moved slower than expected.
The iShares S&amp;P GSCI Commodity-Indexed Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GSG#NYSE">GSG</a>), an exchange-traded fund that provides broad exposure to a diversified basket of commodities, including energy, agriculture, industrial metals and precious metals, fell nearly 4% in May. GSG is 6% down year-to-date. 
The Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>), an exchange-traded fund that invests in a basket of agricultural commodities such as corn, wheat, soybeans and sugar, eased 2.3% last month. DBA is 7% higher year-to-date
The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), the largest exchange-traded fund investing in contracts on WTI crude oil and other oil-related derivatives, plummeted more than 10% last month. USO is 8.3% lower year to date. 
The Invesco DB Base Metals Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBB#NYSE">DBB</a>), an exchange-traded fund that invests in a basket of industrial metals like copper, zinc, nickel, tin and aluminum, tumbled 7% last month. DBB is 5.9% weaker year to date. 
The Aberdeen Physical Precious Metals Basket Shares ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLTR#NYSE">GLTR</a>), which provides investors with exposure to a basket of precious metals, also fell 3.5% last month. GLTR is 0.9% up year-to-date. 
Other than physical commodities, sharp declines in freight costs were also observed in May, with the Baltic Dry Index, widely regarded as the most popular global shipping costs index, plummeting 39%. 
<figure class="wp-block-table"> 
<table>
<thead>
<tr>
<th>ETF Name</th>
<th>Ticker</th>
<th>Commodity Type</th>
<th>% Change in May</th>
<th>% Change Year to Date</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares S&amp;P GSCI Commodity-Indexed Trust</td>
<td>GSG</td>
<td>Broad basket of commodities</td>
<td>-4.0%</td>
<td>-6.0%</td>
</tr>
<tr>
<td>Invesco DB Agriculture Fund</td>
<td>DBA</td>
<td>Agricultural commodities</td>
<td>-2.3%</td>
<td>+7.0%</td>
</tr>
<tr>
<td>United States Oil Fund</td>
<td>USO</td>
<td>WTI crude oil and derivatives</td>
<td>-10.0%</td>
<td>-8.3%</td>
</tr>
<tr>
<td>Invesco DB Base Metals Fund</td>
<td>DBB</td>
<td>Industrial metals</td>
<td>-7.0%</td>
<td>-5.9%</td>
</tr>
<tr>
<td>Aberdeen Physical Precious Metals Basket Shares ETF</td>
<td>GLTR</td>
<td>Basket of precious metals</td>
<td>-3.5%</td>
<td>+0.9%</td>
</tr>
</tbody>
</table>
</figure>
Chart: Commodity ETFs&#8217; Year-to-Date Performance
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="733" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-1024x733.png" alt="" class="wp-image-51369" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-1024x733.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-300x215.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-768x550.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-1536x1099.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c.png 1724w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Photo: Shutterstock

Macro Economic Events

Federal Reserve

ETFS Physical Precious Metal Basket Shares

GLTR

5 Commodity ETFs To Watch When PPI Inflation Data Drops Wednesday

<ul>
<li>Aluminum available for withdrawal at London Metal Exchange warehouses fell to a record low. Still, the latest sign of supply shortages isn&rsquo;t enough to break the pessimistic sentiment that is ruling metals markets as demand worsens,&nbsp;<a class="editor-rtfLink" href="https://www.bloomberg.com/news/articles/2022-05-13/aluminum-warehouse-stocks-plunge-to-record-low-amid-tight-supply?sref=TBDibEcD" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">writes Bloomberg</a>.</li>
<li>On-warrant aluminum inventories fell 9.7% to 260,275 tons, breaking a record set in 1997 and surpassing a previous low set in 2000.</li>
<li>Stockpiles have fallen 63% this year, on track for a record annual drop, as strong demand and a string of smelter curtailments have pushed the market into a growing deficit.</li>
<li>Despite the shrinking stocks, the aluminum price wiped out earlier gains after the inventory data, indicating that the focus remained fully on the dangers to demand.</li>
<li>The mood in metals markets has turned radically in recent weeks, with concerns about the global economy and Covid lockdowns weighing on demand in top customer China. Aluminum has dropped 33% from a record high in March, wiping away the year&rsquo;s gains.</li>
<li>&ldquo;The rally in aluminum was relentless, and now we&rsquo;re seeing a pretty strong correction. The demand outlook is pretty weak across the globe, but the supply risk is still very evident,&rdquo; Geordie Wilkes, head of research at Sucden Financial Ltd., stated.</li>
<li>Photo via Wikimedia Commons</li>
</ul>

News

iPath DJ-UBS Aluminum Subindex Total Return ETN

E-TRACS UBS Bloomberg CMCI Industrial Metals ETN

Aluminum Inventories Reach A New Low, Prices Plunged

<ul>
<li>Inventories of aluminum, copper, nickel, and zinc, four of the main contracts traded on the London Metal Exchange, have plunged by up to 70% over the past year, as record power prices in Europe hit production and the Ukraine war threatened output from Russia,&nbsp;<a class="editor-rtfLink" href="https://www.ft.com/content/8172498a-30f4-4c37-a621-9571042be5ee" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">the Financial Times reports</a>.</li>
<li>Traders and big consumers have tapped warehouses for the material amid the booming demand as economies have recovered from pandemic lockdown restrictions and supply chain disruptions.</li>
<li>The trend was most evident in zinc, where prices rose 2.8% on April 12 to a 16-year high of almost $4,400 a tonne.</li>
<li>Since the start of April, available zinc stocks on the LME plunged 60,000 tonnes to a two-year low of just over 45,000 tonnes.&nbsp;</li>
<li>Analysts acknowledged that the soaring gas and power prices are behind the drawdown. They forced companies to curtail production at lossmaking zinc and aluminum smelters. Other reasons are production cuts and possible disruption of copper and nickel from Russia amid its war with Ukraine.</li>
<li>The&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/news/22/03/26272208/nickel-turmoil-saga-continues-with-another-15-limit-up-spike-on-lme-bloomberg" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">LME had to suspend trading in nickel</a>&nbsp;in March after a vicious short squeeze sent the price up by more than 250%.&nbsp;</li>
<li>The crisis could drive up the price of the LME as traders and producers seek to close short positions by repurchasing contracts.&nbsp;</li>
<li>An analyst saw the supply of refined copper to lag demand by 375,000 tonnes in 2022, double its previous estimate and large enough to deplete all visible stocks by December.</li>
<li>Photo by jannonivergall via Pixabay</li>
</ul>

PDBC

Surging Power Prices Trigger Severe Metal Crisis: FT

The selling in Chinese stocks has shown no signs of abatement in recent days, as double digit losses have quickly eroded much of this year&rsquo;s gains.

	This sudden collapse has most notably affected single country exchange-traded funds such as the iShares FTSE/Xinhua China 25 Index (ETF) (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>), which has dropped more than 19 percent over the last month. While investing in specific foreign countries can be risky, even more diversified emerging market ETFs have experienced the spreading pain of China&rsquo;s drop.
<h3>The China Effect: ETFs</h3>
	The Vanguard Emerging Markets Stock Index Fd (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>) and iShares MSCI Emerging Markets Indx (ETF) (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>) have both fallen over 6 percent in the early days of July, in what appears to be a sharp correction. VWO and EEM are the largest diversified emerging market equity funds with over $73 billion in combined assets.
<div id="preview-wrapper">
<div id="file-preview">
		<a href="https://www.benzinga.com/imce?app=nomatter%7Cimceload%40imceInline.load#" title=""><img alt="eem.png" height="284" src="https://www.benzinga.com/files/u79448/eem.png" width="460" /></a></div>
</div>

	In both indices, China holds the top spot in terms of percentage allocation to a single nation. Currently publicly traded Chinese companies make up 23 percent of EEM and 28 percent of VWO. Other top emerging market countries in these indices include Taiwan, South Korea, India, South Africa and Brazil.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/07/5658084/how-chinas-crash-affects-stocks-trying-to-go-private">How China's Crash Affects Stocks Trying To Go Private</a></bzrelatedlink>
<h3>Overweight China</h3>
	The overweight nature of China&rsquo;s influence is due to the market-cap weighted construction methodology of each fund. In addition, China&rsquo;s status as a mega-economy will mean that the repercussions from a decline will be felt in other peripheral areas of the global marketplace.
<h3>Other Emerging Stocks Dealing With Volatility</h3>
	Emerging market stocks are also contending with the recent volatility in the United States Oil Fund LP (ETF) (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) and PowerShares DB Base Metals Fund (ETF) (NYSE: <a class="ticker" href="/stock/dbb#NYSE">DBB</a>), which have experienced steep declines in recent weeks. Many of these nations are rich in natural resources and heavily dependent on the strength of commodity prices to sustain their burgeoning economic activity.

	One fund that has ridden the elevator down to a softer landing is the iShares MSCI Emerging Markets Minimum Volatility ETF (iShares Inc. (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>)). As its name implies, this ETF selects a smaller universe of emerging market stocks with a historical penchant for lower volatility.

	While EEMV has still experienced a significant decline from its highs, it is outperforming EEM by 3.40 percent so far this year.

	Disclosure: At the time this article was written, some clients of FMD Capital Management owned shares of VWO.&nbsp; 
Image Credit: <a href="https://pixabay.com/en/yuan-rmb-currency-chinese-backside-82936/">Public Domain</a>

Emerging Market ETFs

EEMV

Emerging Market ETFs Feel The Pain Of China Collapse

<a href="http://www.benzinga.com/topic/etfs">ETF</a> Outlook for Tuesday, July 22, 2014

	&nbsp;

	After beginning the week lower, stocks were able to rally into the close and ended Monday with modest losses.

	The geopolitical concerns continue to be the black cloud hanging over the market; however, investors have become numb to unrest around the world. Over the last 15 years the number of &ldquo;hot spots&rdquo; globally has consistently been high. Investors no longer panic as they did before 9/11.

	The important factor will be the magnitude of any escalations in the <a href="http://www.benzinga.com/topic/Ukraine">Ukraine</a> or Gaza this week.

	iShares Dow Jones U.S. Aerospace &amp; Defense ETF (NYSE: <a class="ticker" href="/stock/ita#NYSE">ITA</a>)

	Considering what&#39;s happening around the world, the winner among sector ETFs yesterday was no surprise. The ETF gained 0.5 percent and should continue its winning ways today after Lockheed Martin (NYSE: <a class="ticker" href="/stock/lmt#NYSE">LMT</a>) reported better than expected earnings before the opening bell.

	ITA has strong support at $105 and resistance near $113; the ETF closed yesterday at $108.21.

	Related Link: <a href="http://www.benzinga.com/etfs/sector-etfs/14/07/4714545/technology-etf-may-be-safe-bet-in-volatile-market">Technology ETF May Be Safe Bet In Volatile Market</a>

	PowerShares Dynamic Leisure &amp; Entertainment ETF (NYSE: <a class="ticker" href="/stock/pej#NYSE">PEJ</a>)

	The ETF&#39;s fifth largest holding, McDonald&rsquo;s (NYSE: <a class="ticker" href="/stock/mcd#NYSE">MCD</a>), reported earnings this morning that are not being greeted by investors with open arms. The stock is trading lower premarket, and it could weigh on shares of PEJ.

	The ETF has several other stocks in the top ten that have been in the news lately. Shares of Time Warner (NYSE: <a class="ticker" href="/stock/twx#NYSE">TWX</a>) spiked on a potential takeover, and Yum! Brands (NYSE: <a class="ticker" href="/stock/yum#NYSE">YUM</a>) has fallen hard after earnings last week.

	The ETF lost 0.7 percent yesterday to close at $33.60. The important short-term support for the ETF is at the $33.25 area.

	PowerShares DB Base Metals ETF (NYSE: <a class="ticker" href="/stock/dbb#NYSE">DBB</a>)

	A 1.4 percent rally yesterday sent the commodity ETF to the best level in more than a year.

	The rising price in zinc, which makes up 37 percent of the allocation, has helped push the ETF to new highs. The remainder of the portfolio is composed of aluminum (33 percent) and copper (31 percent). Both aluminum and copper prices have also been strong over the last few months, as global growth has remained at levels that could put pressure on supplies.

Sector ETFs

Previews

Pre-Market Outlook

iShares Dow Jones US Aerospace & Defense Index Fund

PowerShares ETF Leisure & Entertainment Port

Global Unrest Fuels One ETF; Global Metals Demand Another One

Here is the ETF Professor's ETF Watch List for Tuesday, April 9, 2013.

Keep an eye on the PowerShares DB Base Metals Fund (NYSE: <a class="ticker" href="/stock/dbb#NYSE">DBB</a>).

Give the First Trust ISE-Revere Natural Gas Index Fund (NYSE: <a class="ticker" href="/stock/fcg#NYSE">FCG</a>) a look.

The Vanguard Growth ETF (NYSE: <a class="ticker" href="/stock/vug#NYSE">VUG</a>) is worth a trade.

Emerging markets plays of the day: iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>), iShares MSCI Taiwan Index Fund (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>) and the iShares MSCI Mexico Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/eww#NYSE">EWW</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: WisdomTree Emerging Markets Local Debt ETF (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>).

Broad U.S. Equity ETFs

Short Ideas

New ETFs

Currency ETFs

First Trust ISE-Revere Natural Gas Index Fund

ETFs to Watch April 9, 2013 (DGG, EWT, VUG)

Harvard Management Company, investment manager of the largest U.S. university endowment plan, has been one of the more active users of ETFs among university endowments. 

The investment firm's use of ETFs dates back at least several years and HMC is also known <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/05/2596078/institutions-increasing-use-of-etfs">for embracing an array of emerging markets funds</a>.

Going somewhat unnoticed in the fanfare of the most recent 13F filing season is that HMC still holds investments in about 20 ETFs. That much is not surprising. Something else that drew little attention was the degree to which HMC slashed its exposure to emerging markets ETFs in the fourth quarter.

From Chile to China to India, HMC pared stakes in plenty of popular country-specific emerging markets ETFs in the last three months of 2012. 

The iShares MSCI Chile Capped Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/ech#NYSE">ECH</a>) was just one of the emerging markets ETFs HMC has reduced exposure to. HMC held nearly 439,250 shares of the lone Chile ETF at the end of the fourth quarter, a 13 percent reduction from the prior three-month period. 

Staying in Latin America, HMC reduced its exposure to the iShares MSCI Mexico Capped Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/eww#NYSE">EWW</a>) by 25 percent to about 384,470 shares. HMC also reduced its stake in EWW's largest holding, mobile phone carrier America Movil (NYSE: <a class="ticker" href="/stock/amx#NYSE">AMX</a>), by three percent while leaving unchanged its position in EWW's second-largest holding, Fomento Economico (NYSE: <a class="ticker" href="/stock/fmx#NYSE">FMX</a>).

The endowment plan manager also lowered its stake in the iShares MSCI Brazil Capped Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) by <a href="http://whalewisdom.com/filer/harvard-management-co-inc">eight percent last quarter</a>. HMC's positions in Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>), EWZ's two largest holdings, were unchanged. HMC also liquidated its entire stake in the iShares S&amp;P Latin America 40 Index Fund (NYSE: <a class="ticker" href="/stock/ilf#NYSE">ILF</a>)

Perhaps in a sign that some professionals are starting to realize <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/11/3050066/four-reasons-to-prefer-this-china-etf-over-fxi">there are better ways to grab ETF exposure to China</a>, HMC slashed its investment in the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) by 44 percent in the fourth quarter. 

That may sound like a lot, but HMC also liquidated all of its positions in the WisdomTree India Earnings ETF (NYSE: <a class="ticker" href="/stock/epi#NYSE">EPI</a>) and the iShares MSCI Poland Capped Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/epol#NYSE">EPOL</a>).

HMC's stakes in some of FXI's top-10 holdings, including China Mobile (NYSE: <a class="ticker" href="/stock/chl#NYSE">CHL</a>) and Cnooc (NYSE: <a class="ticker" href="/stock/ceo#NYSE">CEO</a>), were unchanged. 

Staying in Asia, HMC lowered its stake in the iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>) by 18 percent, but left unchanged its investments in the iShares MSCI Malaysia Index Fund (NYSE: <a class="ticker" href="/stock/ewm#NYSE">EWM</a>) and the iShares MSCI Philippines Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/ephe#NYSE">EPHE</a>). HMC also did not alter its position in the Market Vectors Indonesia ETF (NYSE: <a class="ticker" href="/stock/idx#NYSE">IDX</a>), the management firm's fifth-largest holding.

HMC also cut its investment in the iPath MSCI India Index ETN (NYSE: <a class="ticker" href="/stock/inp#NYSE">INP</a>) by 48 percent to just over 401,200 shares. The firm also sold nearly 2,300 shares of the iShares MSCI Turkey Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/tur#NYSE">TUR</a>) in the quarter.

However, while HMC was busy reducing exposure to emerging markets ETFs, it did add to some of its U.S.-focused positions. HMC's investments in the iShares Core S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>) and the iShares Russell 2000 Index Fund (NYSE: <a class="ticker" href="/stock/iwm#NYSE">IWM</a>) grew by four and six percent, respectively, during the fourth quarter. HMC added seven percent to its stake in the Vanguard Dividend Appreciation ETF (NYSE: <a class="ticker" href="/stock/vig#NYSE">VIG</a>), the largest dividend ETF by assets.

During the fourth quarter, HMC slashed its stake in the iShares MSCI EAFE Index Fund (NYSE: <a class="ticker" href="/stock/efa#NYSE">EFA</a>) by 80 percent, reducing its investment in that ETF by over 126,300 shares to just under 30,000 shares, <a href="http://whalewisdom.com/filer/harvard-management-co-inc">according to the most recent 13F</a>. The firm also added a new investment in the Vanguard MSCI EAFE ETF (NYSE: <a class="ticker" href="/stock/vea#NYSE">VEA</a>) of almost 232,400 shares.

HMC was also active with commodities funds during the fourth quarter, reducing positions in the PowerShares DB Agriculture Fund (NYSE: <a class="ticker" href="/stock/dba#NYSE">DBA</a>) and the PowerShares DB Energy Fund (NYSE: <a class="ticker" href="/stock/dbe#NYSE">DBE</a>). The firm added to positions in the PowerShares DB Base Metals Fund (NYSE: <a class="ticker" href="/stock/dbb#NYSE">DBB</a>) and the PowerShares DB Precious Metals Fund (NYSE: <a class="ticker" href="/stock/dbp#NYSE">DBP</a>).

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Intraday Update

ISHARES MSCI PHILIPPINES INVESTABLE MARKET INDEX FUND

EPHE

iShares MSCI Poland Investable Market Index Fund ETF

EPOL

Fomento Economico Mexicano S.A.B. De C.V.

iShares Trust S&P Latin America 40 Index Fund

iShares MSCI Turkey Investable Market Index Fund

VALE

Harvard Management Slashes EM Exposure, Still Loves ETFs

One of the most used market buzz terms in recent months has been "fiscal cliff." That is the ominous scenario in which tax cuts expire and are met with tax increases and spending reductions. While it has been painfully obvious for years that Uncle Sam needs to spend less money, the spending cuts could be muted by the fiscal cliff's other issues.

Positive momentum gained from spending reductions will take a while to have a material impact on the broader economy and that ebullience will almost certainly be initially thwarted by the negativity that comes with the expiration of tax cuts and the introduction of tax hikes. 

Or if one chooses to explain the concept of the fiscal cliff to a second-grader, the adjectives awful, bad and terrible will suffice. If the fiscal cliff is not addressed by the end of the year, the U.S. could <a href="http://lexicon.ft.com/Term?term=fiscal%20cliff">lose $600 billion in economic output</a>, enough to send the world's largest economy back into a recession. 

Hopefully, that will not happen, but if the fiscal cliff does come to pass, these ETFs could be in for some selling pressure.

Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>)
Marquee U.S. economic data points have been volatile to say the least in 2012. One batch is encouraging while another is concerning and that pattern has repeated itself throughout the year. Still, the U.S. consumer has been surprisingly resilient, enabling discretionary ETFs such as XLY to <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/10/2999649/s-p-likes-xly-tepid-on-rival-etfs">stellar year-to-date returns</a>.

XLY, the largest discretionary ETF, is up 19 percent while the SPDR S&amp;P Retail ETF (NYSE: <a class="ticker" href="/stock/xrt#NYSE">XRT</a>) is up 18.1 percent. The Market Vectors Retail ETF (NYSE: <a class="ticker" href="/stock/rth#NYSE">RTH</a>) has gained over 21 percent. This trio and rival funds are vulnerable in a fiscal cliff scenario, though. 

A $600 billion hit to GDP <a href="http://isharesblog.com/blog/2012/09/28/look-out-below-the-fiscal-cliff-steepens/">is roughly four percent</a> of total U.S. economic output. Combine that with the fact that the U.S. consumer is the single most important driver of GDP and it is easy to see why discretionary and retail ETFs could falter if the fiscal cliff is not avoided.

iShares Dow Jones U.S. Aerospace &amp; Defense Index Fund (NYSE: <a class="ticker" href="/stock/ita#NYSE">ITA</a>)
Or the PowerShares Aerospace &amp; Defense Portfolio (NYSE: <a class="ticker" href="/stock/ppa#NYSE">PPA</a>). Things could change after Election Day, but at the moment, there appears to be some bipartisan support for reducing defense spending. Lower defense spending is not a good thing for ETFs that hold stocks like Boeing (NYSE: <a class="ticker" href="/stock/ba#NYSE">BA</a>), Lockheed Martin (NYSE: <a class="ticker" href="/stock/lmt#NYSE">LMT</a>) and General Dynamics (NYSE: <a class="ticker" href="/stock/gd#NYSE">GD</a>), which ITA and PPA do.

ITA and PPA are up eight percent and 10.3 percent, respectively, this year. That sounds good, but the returns are somewhat ominous when considering the S&amp;P is up nearly 14 percent.

iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>)
Or the SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>). The two largest junk bond ETFs combine for over $29.2 billion in assets under management. HYG, JNK and comparable funds have been prime beneficiaries of the Federal Reserve's low interest rate policies, which has arguably forced investors to take on more risk in order to gain yield.

While junk bond ETFs have performed well this year, there have been signs as of late <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/09/2950302/are-junk-bond-etfs-topping-out">the group is ready for a pullback</a> and some analysts have cautioned chasing capital appreciation in these ETFs at current levels is risky. 

Add to that the likelihood the fiscal cliff will take a bit of risk appetite and send bond investors running to investment grade fare, and HYG and JNK look vulnerable, too.

PowerShares DB Base Metals Fund (NYSE: <a class="ticker" href="/stock/dbb#NYSE">DBB</a>)
The PowerShares DB Base Metals Fund does not grab a lot of press, though it should be noted the fund is by no means small or thinly traded. DBB has $328.6 million in AUM and average daily volume of almost 226,350 shares. 

This is the problem with DBB assuming the fiscal cliff arrives. The fund is evenly divided among aluminum, copper and zinc futures contracts. Simply put, demand for those metals will suffer in a recession, plaguing DBB in the process.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Bonds

Futures

PowerShares ETF Trust Aerospace & Defense Portfolio

Merrill Lynch Retail HOLDRS Trust due 12/31/41

Select Sector SPDR-Consumer Discretionary

The Fiscal Cliff Could Punish These ETFs

The last several days of market action has brought plenty of new 52-week lows for individual stocks and ETFs. With investors waiting on central bank action that may not arrive and the potential for Friday's July jobs report to give traders more reason to hit the sell button, the 52-week low club could easily expand in number.

ETFs are not immune from the sour event that is the 52-week low. Highlighting that notion is the fact that on Thursday <a href="http://www.finviz.com/screener.ashx?v=111&amp;f=ind_exchangetradedfund,ta_highlow52w_nl&amp;ft=3">15 ETFs and ETNs made new 52-week or all-time lows</a>.

Additionally, there is no shortage of funds teetering on the brink of this ominous fate. Making matters worse is that in a market environment such as the one investors are contending with right now, what goes down does not always go up. At least not right away and what goes down often goes lower. Here are some candidates to be shorted or avoided.

PowerShares DB Base Metals Fund (NYSE: <a class="ticker" href="/stock/dbb#NYSE">DBB</a>)
The name of this fund gives away its struggles. The PowerShares DB Base Metals Fund's index is currently evenly allocated to aluminum, copper and zinc. Economic growth is slowing in the emerging world, almost non-existent in developed Europe and tepid at best in the U.S., base metals are not likely to find long side support in the near-term. 

DBB has lost almost five percent in the past month and touched a new 52-week low on Thursday. Further retrenchment probably means DBB is headed to $15.

iShares MSCI Emerging Markets Growth Index Fund (NASDAQ: EGRW)
Not even a combined weight in excess of 26 percent to conservative emerging markets South Korea and Taiwan has been able to stem the tide of selling pressure on the iShares MSCI Emerging Markets Growth Index Fund. 

EGRW debuted in February and has hauled in a decent, but not great $10.1 million in assets under management. That AUM number may be a case of bad timing as the combination of emerging markets and growth stocks has not consistently been in favor this year. 

EGRW is also being stung by a 13.1 percent to struggling Brazilian stocks. EGRW is still trading above its all-time low at $47.38, but by less than $3, indicating further repudiation of emerging markets equities means this ETF is vulnerable to new lows.

EGShares Technology GEMS ETF (NYSE: <a class="ticker" href="/stock/qgem#NYSE">QGEM</a>)
The EGShares Technology GEMS ETF is a good news/bad news after touching a new 52-week at $15.10 on Thursday. First, the bad news. QGEM has dropped almost 17 percent in the past three months and Thursday's 4.1 percent decline arrived on abnormally large volume (well above 10 times the average daily turnover).

Now, the bull case. QGEM allocates more than 44 percent of its weight to Chinese equities, which are viewed as undervalued in the eyes of some emerging markets experts. India accounts for almost 38 percent of QGEM's weight and it is not unfair to say Indian equities <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/07/2792665/these-etfs-could-benefit-from-the-indian-blackout">might be bottoming and might have catalysts drive some upside before 2012 ends</a>.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Technicals

After-Hours Center

QGEM

The 52-Week Low Club is Beckoning These ETFs

On the heels of our popular “Eleven For '11” series that we ran late last year, we're upping the ante by one this time around. No, it's not the 12 days of Christmas, though some might say it is a 12-round title fight. We're talking about looking at 12 ETFs across various sectors that merit consideration for 2012 and we're getting the ball rolling with some beta by looking at commodities funds.

Always volatile, sometimes controversial, commodities have taken on a new role in the lexicon of ordinary investors thanks in large part to the evolution of the ETF industry. But those that end the discussion with gold and oil funds are missing out because there are many more potentially profitable opportunities for the taking in the commodities world.

So let's get on with looking at 12 commodities ETFs (and ETNs) that are worth looking at in 2012.

iShares Gold Trust (NYSE: <a class="ticker" href="/stock/iau#NYSE">IAU</a>):
We didn't say ignore gold altogether, did we? After breaking through the $1,900 area in September, gold now resides well below $1,800. Concerned? Don't be. All of the issues that have fueled gold's run – Europe's debt woes, Uncle Sam's debt problem, a weak dollar – remain. Morgan Stanley said in a note today gold could average $2,200 an ounce next year. That makes IAU a steal at current levels.

ETFS Physical Silver Shares (NYSE: <a class="ticker" href="/stock/sivr#NYSE">SIVR</a>):
Maybe more volatile and easily more controversial than gold, silver will be in the spotlight again next year. Whether or not that's a good thing remains to be seen. As we noted earlier, considering that SIVR does the same thing as the iShares Silver Trust (NYSE: <a class="ticker" href="/stock/slv#NYSE">SLV</a>), SIVR is the better bet <a>due</a> to its lower expense ratio. Most 2012 price forecasts imply significant upside from current levels.

United States Copper Fund (NYSE: <a class="ticker" href="/stock/cper#NYSE">CPER</a>):
Until we get an ETF backed by physical copper, the new United States Copper Fund will have to do. Dr. Copper is always a useful tell on the strength of major global economies. Of course, that has meant some tough times for the red metal as of late, but assuming we see more quantitative easing from global central banks, copper will rise. 

iPath DJ-UBS Livestock TR Sub-Index ETN (NYSE: <a class="ticker" href="/stock/cow#NYSE">COW</a>):
We haven't been shy about calling COW a dud this year. After all, cattle and hog prices were soaring this year and the experts were talking about how the newly affluent in emerging markets were eating more high-quality meat. All the while COW was struggling. We'll give credit where it's due and acknowledge COW is up 2.6% year-to-date. Perhaps bigger things await in 2012 if emerging markets return to glory.

ETFS Physical Palladium Shares (NYSE: <a class="ticker" href="/stock/pall#NYSE">PALL</a>):
The only ETF devoted exclusively to physical palladium holdings is PALL. When things are good, they're very good for this ETF. And when they're bad, they're very bad, a fact highlighted by PALL's fall to around $55 in October from $85 in August. The big catalysts with palladium are auto sales in the U.S. and China and Russian production, or lack thereof. Get both of those things going in the metal's favor, and PALL could easily see the $80 area again.

United States Brent Oil Fund (NYSE: <a class="ticker" href="/stock/bno#NYSE">BNO</a>):
If you're going to dabble in futures-backed exchange-traded products that track oil, do it with one that offers a play on Brent, not West Texas Intermediate. Yes, BNO should be on your radar for 2012, but if the ETF breaks $79, it could run back to its 52-week high of $84.19 this year.

PowerShares DB Agriculture Fund (NYSE: <a class="ticker" href="/stock/dba#NYSE">DBA</a>):
Agricultural commodities have seen their share of drama this year, most of it bad. That is true, but two things should be remembered. First, corn, soybeans, etc. will not be left behind in a QE-induced commodities rally. Second, the long-term global food consumption and production trends are scary and that's very good for DBA.

PowerShares DB Base Metals Fund (NYSE: <a class="ticker" href="/stock/dbb#NYSE">DBB</a>):
All of a sudden the PowerShares DB Base Metals Fund's chart looks pretty good as the ETF now has room to tack on 10% or more in effort to get back to the 200-day line. What DBB really needs for a sustainable rally is good economic fundamentals from major global economies. That will prompt increased aluminum and copper demand as well as higher use of other industrial metals.

Market Vectors Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdx#NYSE">GDX</a>):
An equity-based play or two belong on this list and why not start off with a gold miners ETF? Precious metals mining stocks and ETFs have been under fire this year for lagging the metals they extract from the earth, but that situation has been improving recently. Valuations on large-cap gold miners look compelling right now and if gold's bull run continues next year, and it should, GDX looks like a smart way to play that move.

Global X Fertilizers/Potash ETF (NYSE: <a class="ticker" href="/stock/soil#NYSE">SOIL</a>):
Sure you can dance with other agribusiness ETFs, but one that is entirely devoted to fertilizer stocks actually makes a lot of sense. If the broader market improves next year, high-beta stocks like fertilizer and potash stocks will rally. And if you like an ETF like DBA, than the Global X Fertilizers/Potash ETF makes a lot sense as an equity-based alternative.

Teucrium Corn ETV (NYSE: <a class="ticker" href="/stock/corn#NYSE">CORN</a>):
CORN has been a big a disappointment lately and the fund barely took place in Thursday's big rally. Relief may come in the form of election year politics that will likely see no smart candidate go to places like Iowa and Minnesota and say he or she wants to curb ethanol production.

SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE: <a class="ticker" href="/stock/xop#NYSE">XOP</a>):
XOP is a great tool for short-term traders with a volatile nature that is reminiscent of a leveraged ETF. The ETF's low expense ratio and exposure to integrated oil stocks is a plus for conservative investors. Not to mention, XOP is a play on just about every U.S. shale formation, rising oil prices and the fund is full of potential buyers and sellers in the energy M&amp;A game.

Rumors

Price Target

Global

Econ #s

CORN

Market Vectors ETF Trust Market Vectors Gold Miners

PALL

SIVR

SOIL

Twelve For '12: Commodities ETFs to Watch In The New Year

Direxion Daily Emerging Markets Bull 3x Shares(<a class="ticker" href="/stock/etf#">ETF</a>) (AMEX: <a class="ticker" href="/stock/edc#AMEX">EDC</a>) fell 5.64% on Thursday as Petroleo Brasileiro SA (ADR) (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) lost 2.45%.

Direxion Daily Semiconductor Bull 3X Shares (AMEX: <a class="ticker" href="/stock/soxl#AMEX">SOXL</a>) dropped 4.81%, and closed at $27.88. In the semiconductor space, NVIDIA Corporation (NASDAQ: <a class="ticker" href="/stock/nvda#NASDAQ">NVDA</a>) plunged 5.01%, and Advanced Micro Devices, Inc. (NYSE: <a class="ticker" href="/stock/amd#NYSE">AMD</a>) slipped 4.02%.

Direxion Daily Financial Bear 3X Shares(<a class="ticker" href="/stock/etf#">ETF</a>) (AMEX: <a class="ticker" href="/stock/faz#AMEX">FAZ</a>) lost 4.55% as JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>) jumped 2.73%, and Citigroup Inc. (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>) gained 2.35%.

Powershares DB Base Metals Fund (<a class="ticker" href="/stock/etf#">ETF</a>) (AMEX: <a class="ticker" href="/stock/dbb#AMEX">DBB</a>) traded lower today along with aluminum, zinc and copper. DBB fell 3.63%, and it closed at $18.07.

Direxion Daily Emerging Markets Bull 3x Shares

Aberdeen Emerging Markets Telecommunications & Infrastructure Fund

NVDA

SOXL

Benzinga's Top ETF Decliners, October 20th (EDC, SOXL, FAZ, DBB)

Wow, Dr. Copper needs a doctor himself. Slumping for a six consecutive day, the red metal and preferred economic indicator of many a pundit is once again testing 14-month lows. Slowing economic growth or speculation thereof in China will do that.

Assuming the best and that is the U.S. and other major global economies do not walk down Double-Dip Recession Avenue, copper could rebound and that rebound is likely to both profitable and volatile. Of course, that rebound must aided by China buying more copper and whether or not that happens remains to be seen.

That said, there might be some value to be had with copper fare for the more adventurous among us. So have a look at these ETFs in addition to the usual suspect: The iPath Dow Jones-UBS Copper TR Sub-Index ETN (NYSE: <a class="ticker" href="/stock/jjc#NYSE">JJC</a>).

Global X Copper Miners ETF (NYSE: <a class="ticker" href="/stock/copx#NYSE">COPX</a>):
The Global X Copper Miners ETF is a fine idea for those looking for a bit more of a global spin on copper equities without excessive exposure to Freepor-McMoRan (NYSE: <a class="ticker" href="/stock/fcx#NYSE">FCX</a>). Canada and the U.K. account for 59% of the fund's country weight. Support held just over $10 and that implies a break below $10 would be a technical disaster.

First Trust ISE Global Copper Index Fund (NYSE: <a class="ticker" href="/stock/cu#NYSE">CU</a>):
Pick your poison between COPX and the First Trust ISE Global Copper Index Fund, though you don't need both in your portfolio at the same time. CU also features roughly 59% exposure to Canada and the U.K. and in a “risk on” environment, we would like the fact that Rio Tinto (NYSE: <a class="ticker" href="/stock/rio#NYSE">RIO</a>) is the ETF's largest holding. CU has slightly outperformed COPX over the past 90 days, though that isn't saying much.

PowerShares DB Base Metals Fund (NYSE: <a class="ticker" href="/stock/dbb#NYSE">DBB</a>):
The PowerShares DB Base Metals Fund tracks an index comprised of aluminum, copper and zinc. Not places one wants to be in a bad economy, but that also bodes well for the fund's performance should positive economic start flowing in earnest. Beware this chart is very ugly. A move below $18 probably takes DBB back to the 2010 low of $16.74.

iShares MSCI Chile Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/ech#NYSE">ECH</a>):
How intimately tied to copper prices is the lone Chile-specific ETF on the market? Well, JJC is down about 30% in the past three months while ECH is down 33%. Yes, that qualifies as intimate and those are the breaks when investing in the world's largest copper producer, which is in fact Chile.

iShares MSCI Peru All Capped Index Fund (NYSE: <a class="ticker" href="/stock/epu#NYSE">EPU</a>):
By comparison, EPU has held up nicely against other emerging markets and Latin American ETFs in recent months. To boot, the ETF has not shown a deep correlation to copper futures in that time, but Peru is the third-largest copper producing country in the world and that makes EPU one to watch for a copper rebound.

COPX

iPath Dow Jones UBSpper Subindex Total Return ETN

5 ETFs For a Copper Rebound

PowerShares DBmmodity Index Optimum Yield Diversified Fund

iShares Trusthen & Steers Realty Majors Index Fund

iShares Trust Barclays 7-10 Year Treasury Bond Fund

iShares Trust Dow Jones US Real Estate Fund Index

iShares S&P National AMT-Free Municipal Bond Fund

PowerShares Fundamental High Yieldorate Bond Portfolio

QQQQ

iShares Trust Barclays 1-3 Year Treasury Bond Fund

iShares Trust Barclays 20+ Year Treasury Bond Fund

Commodities Withstood the Recent Market Selloff

Last week's market volatility is a good reminder on how precarious it is in commodity investing. For the week, broadbase commodity index ETF (DBC) dropped 3.09% while Gold (GLD) fared better, dropping only 0.81%. Agriculture commodity (DBA) dropped even more: 3.71%. For more detailed information, please refer to <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/advanced__markets.action" target="_blank">here</a>.
 It is now generally recognized that adding commodity exposure in a long term portfolio that adopts a <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/strategy/View.action?ID=771" target="_blank">strategic </a>asset allocation strategy can increase diversification effect and thus possibly improving risk adjusted returns. However, given the high volatitily (and risk) of commodities, it is important for an investor to understand the difference between a long only approach and long short approach in this asset investment. 
 A long only approach is simply just buying a commodity index such as Powershares DB Commodity Index ETF (DBC) or GSCI commodity index (GSG)  (or sub index such as agriculture (DBA), precious metal (DBP)). A long short approach, on the other hand, can take long and/or short positions on mutliple commodity components simultaneously. It is mostly based on technical indicators such as moving averages, momentums and reversals. This approach has been adopted by professional CTAs (Commodity Trading Advisors). A simple and popular strategy is the <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/strategy/View.action?ID=476" target="_blank">S&amp;P Diversified Commodity Trend Indicators</a>. The following is a short description of the strategy:  The strategy is a simplified variation of  S&amp;P commodity trends indicator (CTI). It is a subset of the S&amp;P DTI by simply eliminating half of the financial assets.
<div>
1.The original asset allocation 
 
<table style="width: 378px;" border="1" cellspacing="0" cellpadding="0">
<tbody>
<tr>
<td width="134" valign="top">
Energy  37.5%
</td>
<td width="242" valign="top">
Powershares DB Energy  (DBE)
</td>
</tr>
<tr>
<td width="136" valign="top">
Industrial metal  10%
</td>
<td width="244" valign="top">
Powershares DB Base Metal  (DBB)
</td>
</tr>
<tr>
<td width="138" valign="top">
Precious metal  10.5%
</td>
<td width="246" valign="top">
Powershares DB Precious Metal  (DBP)
</td>
</tr>
<tr>
<td width="140" valign="top">
Agriculture  42%
</td>
<td width="248" valign="top">
Powershares DB Agriculture  (DBA)
</td>
</tr>
</tbody>
</table>
2. Position determination 
The monthly percentage change of a sector's price is compared to past monthly price changes exponentially weighted to give greatest weight to the most recent return and least weight to the return seven months prior. 
The weights are as follows: 
<table border="1" cellspacing="0" cellpadding="0">
<tbody>
<tr>
<td width="284" valign="top">
NUMBER OF MONTHS
</td>
<td width="284" valign="top">
WEIGHT
</td>
</tr>
<tr>
<td width="284" valign="top">
7  
</td>
<td width="284" valign="top">
2.32%
</td>
</tr>
<tr>
<td width="284" valign="top">
6
</td>
<td width="284" valign="top">
3.71%
</td>
</tr>
<tr>
<td width="284" valign="top">
5
</td>
<td width="284" valign="top">
5.94%
</td>
</tr>
<tr>
<td width="284" valign="top">
4
</td>
<td width="284" valign="top">
9.51%
</td>
</tr>
<tr>
<td width="284" valign="top">
3
</td>
<td width="284" valign="top">
15.22%
</td>
</tr>
<tr>
<td width="284" valign="top">
2
</td>
<td width="284" valign="top">
24.34%
</td>
</tr>
<tr>
<td width="284" valign="top">
1
</td>
<td width="284" valign="top">
38.95%
</td>
</tr>
</tbody>
</table>
3. Monthly rebalancing 
The portfolio is rebalanced monthly by setting every sector to their original percentage and do the position determination again.
 For more information, please refer to <a rel="nofollow" href="http://www2.standardandpoors.com/spf/pdf/index/CTI_Methodology.pdf" target="_blank">"Standard and Poor's Commodity Trend Indicator"</a> document. 
</div>
The following table compares the performance between such<a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=3348" target="_blank"> S&amp;P Commodity Trend Indicators Portfolio (S&amp;PCTI)</a>  and a general broadbase commodity ETF (DBC):
<table border="1" cellpadding="0">
<tbody>
<tr>
<td width="15%">
 
</td>
<td valign="top">
Portfolio
</td>
<td>
Last 3 Years
</td>
<td>
Last 1 Years
</td>
<td>
2007
</td>
<td>
2008
</td>
<td>
2009
</td>
<td>
2010
</td>
<td>
2011
</td>
</tr>
<tr>
<td> </td>
<td valign="top">
 
</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td>
AR(%)
</td>
<td valign="top">
S&amp;PCTI
</td>
<td>
5.049
</td>
<td>
14.884
</td>
<td>
15.939
</td>
<td>
23.768
</td>
<td>
2.282
</td>
<td>
3.186
</td>
<td>
5.148
</td>
</tr>
<tr>
<td>
AR(%)
</td>
<td valign="top">
DBC
</td>
<td>
-8.826
</td>
<td>
25.383
</td>
<td>
31.579
</td>
<td>
-31.799
</td>
<td>
16.187
</td>
<td>
10.154
</td>
<td>
7.695
</td>
</tr>
<tr>
<td>
Sharpe Ratio(%)
</td>
<td valign="top">
S&amp;PCTI
</td>
<td>
29.127
</td>
<td>
113.142
</td>
<td>
91.832
</td>
<td>
107.569
</td>
<td>
14.048
</td>
<td>
23.723
</td>
<td>
39.12
</td>
</tr>
<tr>
<td>
Sharpe Ratio(%)
</td>
<td valign="top">
DBC
</td>
<td>
-20.516
</td>
<td>
150.174
</td>
<td>
160.984
</td>
<td>
-97.51
</td>
<td>
58.736
</td>
<td>
52.501
</td>
<td>
415.108
</td>
</tr>
<tr>
<td>
Standard Deviation(%)
</td>
<td valign="top">
S&amp;PCTI
</td>
<td>
16.389
</td>
<td>
13.074
</td>
<td>
16.719
</td>
<td>
21.232
</td>
<td>
15.572
</td>
<td>
13.045
</td>
<td>
13.119
</td>
</tr>
<tr>
<td>
Standard Deviation(%)
</td>
<td valign="top">
DBC
</td>
<td>
27.914
</td>
<td>
18.435
</td>
<td>
17.728
</td>
<td>
34.962
</td>
<td>
27.397
</td>
<td>
19.578
</td>
<td>
15.275
</td>
</tr>
</tbody>
</table>
 Though <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=3348" target="_blank">S&amp;PCTI</a> under performed in 2009, 2010 and 2011, it out performed DBC in the last 3 years. This is because it had 23.8% return in 2008, compared with DBC's 31.6% loss in the same year. Furthermore,  <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=3348" target="_blank">S&amp;PCTI</a> has a standard deviation 16%, compared with DBC's 28%. In fact,  <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=3348" target="_blank">S&amp;PCTI</a>'s standard deviation is consistent with that of an overall stock market index such as S&amp;P 500 (SPY). 
 It is perhaps even more important to pay attention to maximum drawdowns for <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=3348" target="_blank">S&amp;PCTI</a>:  since its inception 10/1/2007 (this is due to the short histories of commodity ETFs used in this portfolio), the maximum drawdown is about 19% vs. DBC's whopping 60% (during the 2008-2009 detacle). 
 The takeaway from this article is that for active investors, one might want to consider adopting a more conservative approach in commodity exposures. Investors can find Element's ETN (LSC) or Direxion's Commodity Trend Strategy Inv (DXCTX) that implement the S&amp;P  Commodity Trend Indicators strategy. Before you invest, however, you are encouraged to compare the portfolio <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=3348" target="_blank">S&amp;PCTI</a>, LSC and DXCTX.
<div>In the follow up articles, we wil further compare how the long only and long short strategies can be used in strategic and tactical asset allocation portfolios. </div>
<div>
Symbols:<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SLV&amp;count=0013'>SLV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBP&amp;count=0014'>DBP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=GLD&amp;count=0034'>GLD</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBB&amp;count=0014'>DBB</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBA&amp;count=0058'>DBA</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBC&amp;count=0087'>DBC</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBE&amp;count=0017'>DBE</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=USO&amp;count=0046'>USO</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=UNG&amp;count=0015'>UNG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SPY&amp;count=00120'>SPY</a>,
 Symbols (exchange): (NYSE:SLV), (NYSE:DBP), (NYSE:GLD), (NYSE:DBB), (NYSE:DBA), (NYSE:DBC), (NYSE:DBE), (NYSE:USO), (NYSE:UNG), (NYSE:SPY)
Disclosure:
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical </div>
 
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