BOMDB Base Metals Double Short ETN
BOM Fund Description
The DB Base Metals Double Short ETN provides monthly -2x exposure to an index that tracks the performance of futures contracts relating to aluminum, copper and zinc.
BOM Factset Analytics Insight
BOM provides monthly -2x exposure to an index of futures contracts on three industrial metals—aluminum, copper and zinc—deemed to have the least amount of contango by the index provider. The note, like many geared inverse products, is designed to provide this exposure for only for its reset period; in this case, until the next monthly reset. Anyone holding it for longer than this will be subject to the effects of compounding, which can cause the note’s returns to stray (sometimes greatly) from the promised -2x exposure. The index is designed to measure the performance of the chosen futures contracts on the three metals, the returns from rolling those contracts, as well as the cost of borrowing (collateral) as measured by 3-month Treasury bills. Its 75 bp fee is reasonable considering some geared inverse commodities products charge twice that, but trading costs are more important, since the note is designed for day trading. Unfortunately, BOM's assets are thin, which provides very little liquidity for the fund’s shares. It trades very little on most days, and spreads are very wide—unattractive for a tactical tool.
BOM CHARTS AND PERFORMANCE
BOM Portfolio Data
BOM Index Data
BOM Fund Structure
BOM Tax Exposures
BOM Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of BOM. BOM is rated a 5 out of 5.