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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: XoFruitCake who wrote (87055)	7/1/2007 9:24:45 PM
From: XoFruitCake	Respond to of 206212

here is how the operation is described in the DBA prospecteus...Doesn't sound too promising that they solve the problem. Fee is only 0.91% which seem to be pretty good (better than PCRIX??).. dbfunds.db.com Fund Fees and Expenses Yield on 3-month U.S. Treasury bills Expected Annual Net Income DBE (0.78)% 4.93% 4.15% DBO (0.54)% 4.93% 4.39% DBP (0.79)% 4.93% 4.14% DGL (0.54)% 4.93% 4.39% DBS (0.54)% 4.93% 4.39% DBB (0.78)% 4.93% 4.15% DBA (0.91)% 4.93% 4.02% ..... Rather than select a new futures contract based on a predetermined schedule (e.g., monthly), each Index Commodity rolls to the futures contract which generates the best possible ‘implied roll yield.’ The futures contract with a delivery month within the next thirteen months which generates the best possible implied roll yield will be included in each Index. As a result, each Index Commodity is able to potentially maximize the roll benefits in backwardated markets and minimize the losses from rolling in contangoed markets. In general, as a futures contract approaches its expiration date, its price will move towards the spot price in a contangoed market. Assuming the spot price does not change, this would result in the futures contract price decreasing and a negative implied roll yield. The opposite is true in a backwardated market. Rolling in a contangoed market will tend to cause a drag on an Index Commodity’s contribution to the Fund’s return while rolling in a backwardated market will tend to cause a push on an Index Commodity’s contribution to the Fund’s return.

To: XoFruitCake who wrote (87055)	7/2/2007 4:41:08 AM
From: energyplay	Read Replies (3) \| Respond to of 206212

John Dizard wrote two columns in the FT.com about the cost of rolling futures forward for commodity funds, and how the commodity speculators are able to game this to extract a profit at the expense of the commodity funds. His columns are usually in the Tuesday Financial Times, along with James Altucher. Dizard tends to tell the unpleasant truth in a memorable and occasionally funny way, which is why we won't see him on CNBC. Worth reading if you are going to buy one of these funds. First article - ft.com The minor corrections - ft.com ***************** Excerpt ******** Speculators profit from commodity investors By John Dizard Published: January 22 2007 21:10 \| Last updated: January 22 2007 21:10 Speculators on the floors of commodities exchanges have been called many things, but sensitive, or solicitous of the interests of public investors, are not among them. So it shouldn’t be surprising that one of the ways they have of profiting from the passively investing public is called “date rape”. In the pits, physical or electronic, that means betting against the certainty that commodity index investors’ positions are rolled in a mechanistic manner every month, in known patterns on particular days. The phenomenon could be called index roll congestion, or some other euphemism, but as we noted, these are not people who worry about your feelings. Commodities indices were devised to provide a transparent, systematic means for the public to obtain exposure to an asset class that gives a diversified return on capital. Well, actually, they were devised as a way for investment dealers to make money from investors who wanted that diversification. They’ve worked extremely well for the latter purpose, and reasonably well for the former purpose.

To: XoFruitCake who wrote (87055)	8/2/2007 7:23:17 AM
From: Hoatzin	Respond to of 206212

Oil Sector Starts Over with New ETF August 02, 2007 by Tom Lydon When Victoria Bay Asset Management launched the exchange traded fund (ETF) United States Oil Fund (USO) in April 2006, it was supposed to reflect the percentage changes of the spot price of light sweet crude oil. To do this, USO would buy near-term oil futures contracts and roll them into next month's contracts as they expired. Despite USO's $1 billion assets, it quickly fell into contango tangles that ate into those returns, reports Diya Gullapalli for The Wall Street Journal. By April of this year, USO had sprung a leak and fallen more than 15% behind the crude oil price it was created to track. To correct USO's tracking problem, Victoria Bay Asset Management filed for a new oil ETF. The new United States 12 Month Oil Fund will be set up as a commodity pool as well, but unlike USO, it will employ futures contracts differently. This new ETF will track crude oil as measured by the changes in the average 12 months of futures contracts on the New York Mercantile Exchange. The mixing of the 12 months of futures prices will help to mirror the longer-term oil price movements originally intended. We'll have to wait and see if the new oil ETF will prove to be USO's Band-Aid. etftrends.com