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Base Metals ETF (DBB) Hits a New 52-Week High

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For investors seeking momentum, Invesco DB Base Metals Fund (DBB - Free Report) is probably on the radar. The fund just hit a 52-week high and is up 22% from its 52-week low price of $16.77/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

DBB in Focus

Invesco DB Base Metals Fund seeks to track changes in the level of the DBIQ Optimum Yield Industrial Metals Index Excess Return. The index is a rules-based index composed of futures contracts on some of the most liquid and widely used base metals — aluminum, zinc and copper (grade A). DBB charges 77 bps in annual fees (see: all the Industrial Metals ETFs here).

Why the Move?

The base metals segment of the commodity market has been an area to watch lately, given the growing inflation fears and escalating geopolitical tensions. Base metals such as gold and silver are considered as a hedge against inflation as well as a store of wealth for investors. They are often used as a means of preserving wealth during times of financial and political uncertainty and usually do well when other asset classes struggle.

Additionally, signs of improvement in manufacturing activity across the globe have buoyed metals such as copper and zinc.

More Gains Ahead?

Currently, DBB has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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