For investors seeking momentum, Invesco DB Commodity Index Tracking ETF (DBC Quick QuoteDBC - Free Report) is probably on the radar now. The fund just hit a 52-week high and is up 44.2% from its 52-week low price of $19.84 per share.

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

DBC in Focus

The underlying DBIQ Optimum Yield Diversified Commodity Index Excess Return Index is a rules-based index composed of futures contracts on 14 of the most heavily-traded and important physical commodities in the world. The product charges an annual fee of 82 basis points (bps). 

What Led to the Rise?

Prices of several physical commodities are rising amid the Iran war due to growing fears of supply disruptions in the Middle East, a key hub for global energy and raw materials. Escalating tensions threaten shipping through the Strait of Hormuz, a critical route for oil, gas and other commodities, raising concerns about tighter supply. At the same time, traders are adding a geopolitical risk premium and hedging against likely inflation, which are positives for commodity investing.

More Gains Ahead?

DBC may continue its strong performance in the near term, with a positive weighted alpha of 30.72 (as per Barchart.com), which suggests a further rally.