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Silver ETF (DBS) Hits New 52-Week High

Sweta Jaiswal, FRM

For investors looking for momentum, Invesco DB Silver Fund DBS is probably a suitable pick. The fund just hit a 52-week high, up roughly 21.7% from its 52-week low of $21/share.

But does it have more gains in store? Let’s take a look at the fund and its near-term outlook to gain insight into where it might be headed:

DBS in Focus

The fund replicates changes, whether positive or negative, in the level of the DBIQ Optimum Yield Silver Index Excess Return (DBIQ Opt Yield Silver Index ER) along with the interest income from the fund's holdings of majorly US Treasury securities and money market income less the fund's expenses. DBS is charging 79 bps in fees. The fund has amassed $15.3 million in AUM.

Why the Move?

Escalating Sino-US trade war tensions are making investors jittery. Recently, China retaliated by imposing new tariffs of between 5% and 10% on $75 billion worth of goods from the United States, effective on some items from Sep 1 and others from Dec 15. Moreover, effective Dec 15, China has decided to reinstate a 25% tariff on U.S. automobiles and auto parts. To this, Trump responded by raising tariffs to 30% from 25% on $250 billion of Chinese imports effective Oct 1. Moreover, tariffs planned for Sep 1 on some Chinese imports will be revised to 15% from 10%. Also, the uncertainty in market conditions due to geo-political tensions and slowdown in the global economic growth are increasingly adding to the appeal of safe-haven picks like silver ETFs.

More Gains Ahead?

Currently, DBS has a Zacks Rank #3 (Hold) making it hard to get a handle on the fund’s future returns. However, it seems that DBS might remain strong given a positive weighted alpha of 19.2.

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Invesco DB Silver Fund (DBS): ETF Research Reports
 
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