Do You Own Commodity ETF's?

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Rector's picture
Rector
Status: Platinum Member (Offline)
Joined: Feb 7 2010
Posts: 515
Do You Own Commodity ETF's?

A year or so ago I invested some of my IRA funds in DBA, and DBO (Powershares DB Agriculture Fund, Powershares DB Oil Fund) in order to take advantage of the expected rise in commodity prices.  As hoped for, the funds performed well, and I have made a decent return on the investments.

I sat down this morning and read the prospectus for each of the ETFs:

DBO (Oil Fund) is invested 14.64% in Oil Futures Contracts and 80.11% in US Treasuries.

DBA (Agriculture Fund) is invested 13.65% in various agricultural related futures contracts and 87.98% in US Treasuries.

I sold them both for a profit this morning, and I am not saying the funds are doing anything wrong, but I SURELY don't want to be in Treasuries that deep right now.  I just didn't realize the schedule of investments was so heavily skewed towards Treasuries.

If you are trying alternative investments that will perform well in this crazy environment, please read the prospectus.  What I thought was a safer move, turned out to be precisely the opposite of what I was trying to achieve.

Any thoughts?

 

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
BTDT

Rector,

Read the archives.  It's been discussed before, especially DBO.  Example: close to two dozen significant problems in the GLD prospectus. 

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2391
I had PCRIX

This is similar.. full of treasuries too.  I had a very large stake in it in my company 401k... and I pulled what I now call an, "AO" and exited at a big profit mid last week.. before the commodity wreckage started.  I just checked and it's down a hefty 1.92% today alone... whew!  

Rector's picture
Rector
Status: Platinum Member (Offline)
Joined: Feb 7 2010
Posts: 515
Insight vs. Experience

I guess I am one of those people who learns lessons from experience aka "the hard way" when the insight was here all along.  At least I didn't lose my shirt.  I guess GLD is next on my exit list.  It irks me to hold so much cash though. . .  Thanks for your comments.  I will read the archives.

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