Today we examine the top performing, non-leveraged, long only commodity based product in the exchange traded fund and note space in 2012, which will likely surprise most readers. JJT (iPath Dow Jones UBS Tin Total Return ETN) has rallied 14.48% year to date, but in the trailing one year period it is down 21.57%.
Trading volume also has recently picked up notably in the fund, as the ETN typically averages only 2400 shares on a daily basis. We believe that most portfolio managers do not realize that they can access exposure to tin via an ETN, as the product does fly under the radar to a large extent.
Furthermore, it is readily apparent to most the uses for copper, silver, gold, and other metals, whether for industrial use or as precious metals, but tin is likely under-appreciated in this sense. Besides being the 50th element in the periodic table, the metal is often used in electro-plating.
Consumers will often find a small coat of tin on household items such as spoons, forks, knives, or even a can of shaving cream or deodorant. Still, tin can be utilized as a pure metal as well and is often used in storage tanks for chemical solutions within the pharmaceutical industry or in fuse wires or electrodes.
Alloys of tin are also found in soldering and pewter for instance. From a mining standpoint, tin is found primarily in Malaysia, Indonesia, Thailand, as well as Bolivia and Nigeria. Producers of tin include the countries listed above in addition to China.
As more managers with acumen in the commodity futures space, including CTAs, increase their usage of ETFs and ETNs in their investment portfolios (which is a growing trend that we have observed over the past several years we might add), it seems that products such as JJT will continue to attract interest after several years of relative obscurity (JJT only has $8.1 million in assets under management for instance).
We would also caution those inclined to make a snap decision against using such a fund because of its rather low average daily trading volume, to take a step back and reconsider, and speak to a trading desk that has expertise in best execution and access to liquidity in the ETF/ETN space as metals based ETNs such as JJT are often more liquid than they appear to the naked eye.
iPath Dow Jones UBS Tin Total Return ETN
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