DDPDB Commodity Short ETN
DDP Fund Description
DDP tracks the performance of futures contracts on wheat, corn, crude oil, heating oil, gold, and aluminum.
DDP Factset Analytics Insight
DDP is, like most leveraged and inverse products, designed to provide -1x exposure to its index for a finite period; in this case, monthly. Investors holding it beyond its next monthly reset date will be subject to the effects of compounding—a dynamic that can cause the note’s performance to drift from its promised -1x exposure. The note’s index tracks a single futures contract on six commodities: wheat, corn, light sweet crude, heating oil, gold, and aluminum. The index tracks the futures contract on each commodity determined to be least influenced by contango. The index measures the changes in price of the futures contracts, the returns from rolling those contracts over, and the cost of borrowing (collateral) as measured by the 3-month Treasury bill. Although its 75 bp fee is entirely reasonable compared with other inverse products, trading costs are of greater importance, since DDP is designed for round-trip intraday trading. To that end, the market for DDP is both shallow and wide, with limited trading and wide spreads. Worse, the note is closed for creations, meaning the basic arbitrage mechanism that keeps market price and fair value aligned is broken.
DDP CHARTS AND PERFORMANCE
DDP Portfolio Data
DDP Index Data
DDP Fund Structure
DDP Tax Exposures
DDP Factset Analytics Block Liquidity
This measurement shows how easy it is to trade a $1 million USD block of DDP. DDP is rated a 5 out of 5.