Uncertainty in Europe and China and a growing threat of a double-dip recession in the US has resulted in a rapid decline in the price of base metals.
The PowerShares DB Base Metals Fund (DBB) fell 24% in the past month compared to a 15% decline for the broader stock market over the same time period.
According to the Wall Street Journal, China manufacturing activity has contracted for three consecutive months. Weakening industrial activity in China pressures copper prices since the country accounted for 40% of the world’s refined copper consumption last year.
DBB tracks 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). The index is intended to reflect the performance of the industrial metals sector. The expense ratio for the $400 million ETF is 0.75%.
For more ways to invest, see the complete list of commodity ETFs.
– ETF MarketPro Staff
October 3, 2011