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DBC, DBA To Diversify Holdings
Written by Matt Hougan   
Wednesday, 30 September 2009 21:40  |  Related ETFs: DBA / DBC

 

The Commodity Futures Trading Commission’s effort to clamp down on the role of index investors continues to impact exchange-traded funds.

On Wednesday, Sept. 30, Deutsche Bank announced that the PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC) and PowerShares DB Agricultural Commodity Index Fund (NYSEArca: DBA) would massively diversify the type and number of commodity futures they hold.

DBC and DBA are two of the most popular commodity ETFs in the world, with $3.4 billion and $2.2 billion in assets, respectively. The funds until now have held concentrated positions in a select number of commodity futures: six for DBC and four for DBA.

But with the CFTC threatening to enact position limits on a broad range of commodity futures—and with its recent decision to enforce existing position limits on agricultural futures for ETFs—Deutsche Bank has decided that the time is right to spread its bets.

The moves will not alter the sector-level distribution in DBC; DBA, however, will make a significant move into livestock, taking on a 25% position in cattle and hogs.

The changes in the portfolios will take place between Oct. 19 and Oct. 31. The old and new index weights are listed below.

 

Old DBC New DBC
Commodity Weight Commodity Weight
WTI Crude 35.00% WTI Crude 12.38%
Heating Oil 20.00% Brent Crude 12.38%
Gold 10.00% Heating Oil 12.38%
Aluminum 12.50% RBOB Gasoline 12.38%
Corn 11.25% Natural Gas 5.50%
Wheat 11.25% Gold 8.00%
Silver 2.00%
Aluminum 4.17%
Zinc 4.17%
Copper Grade A 4.17%
Corn 5.63%
Wheat 5.63%
Soybeans 5.63%
Sugar 5.63%

 

Old DBA New DBA
Commodity Weight Commodity Weight
Corn 25.00% Corn 12.50%
Wheat 25.00% Soybeans 12.50%
Soybeans 25.00% Wheat 6.25%
Sugar 25.00 % Kansas Wheat 6.25%
Sugar 12.50%
Cocoa 11.11%
Coffee 11.11%
Cotton 2.78%
Live Cattle 12.50%
Feeder Cattle 4.17%
Lean Hogs 8.33%

 

 

 

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