For investors seeking momentum, iPath Bloomberg Nickel Subindex Total Return ETN is probably on radar now. The fund just hit a 52-week high, and is up 69.6% from its 52-week low price of $10.11/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 on where it might be headed:
JJN in Focus
The note tracks the Bloomberg Nickel Subindex Total Return, which reflects the returns that are potentially available through an unleveraged investment in the futures contracts on nickel. The product is unpopular and illiquid with AUM of just $14 million and average daily volume of around 22,000 shares. The product charges 75 bps in annual fees (see: all the Industrial Metal ETFs here).
Why the Move?
The industrial metals have been an area to watch lately given the surge in their prices, especially nickel. The pick-up in demand from alloy-makers especially in China, and lower stockpiles are pushing nickel prices higher. Notably, China is the world’s largest buyer of raw materials. Additionally, a weak dollar is a huge boon to the base metal price, as it makes nickel affordable for holders of other currencies.
More Gains Ahead?
Currently, JJN has a Zacks ETF Rank #3 (Hold) with a High risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, it seems that the ETF might remain strong given a high weighted alpha of 42.10% and a high 20-day volatility of 40.51%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
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