Wednesday, October 10, 2012

"Investing in Lead: The Definitive Guide" (LEDD; LD)

As part of our never-ending quest...
I'm sorry I can't continue that spiel. Let's try:
"Lead, the poor man's tungsten"

From Commodity HQ via Insider Monkey:
...Physical Lead
Though investing in physical lead is possible, the density of the metal and low value-to-weight ratio (especially compared to precious metals), makes achieving exposure in this manner impractical....
...Lead ETPs
There are multiple exchange-traded products offering access to lead as well, including funds listed in the U.S. and internationally. Currently, exchange-traded lead products achieve exposure through futures contracts, meaning that unless specified, investors are exposed to the nuances of contango and backwardation and that returns can differ from a hypothetical return on spot prices.

The iPath DJ-UBS Lead Subindex Total Return SM Index (NYSEARCA:LD) is linked to an index comprised of lead futures, and charges an expense ratio of 0.75%. Another iPath option is the iPath Pure Beta Lead (NYSEARCA:LEDD), which follows an index of single exchange traded futures contracts, but unlike other future contract ETPs, LEDD works to avoid contango by buying preselected contracts using the Barclays Pure Beta Return Series 2 Methodology. For international investors, ETF securities offers funds delivering both leveraged and inverse exposure to indexes comprised of lead futures [see also Understanding Contango Through Natural Gas Futures].

Compared to ETPs that encompass a wider range of industrial metals, such as the Rogers Intl Commodity Metal ETN (RJZ) or the Powershares DB Base Metals Fund (NYSEARCA:DBB), lead has been spent the last year trending lower than the overall funds. This was not the case in ’09 and ’10, when most industrial metals were performing far below average, and lead remained at average, if not higher price levels than before. Due to the steadily increasing demand of lead over the last 10 years, it has become a fairly stable commodity, and a good resource for investors who prefer reliable prices....MORE
Let's stipulate that using phrases such as "gaining exposure to lead" just sounds wrong.
See also:

Volatility Getting You Down, Bunky?
Maybe it's time you looked into the tallow market.
The tallow/grease/lard complex has been traded for five thousand years:

2992 B.C.
Honey I'm home!
Hi dear, anything new in tallow?
Nope. Same ol', same ol'.

2008 A.D.
Ditto.... 
A Look at the Tallow/Grease/Lard Complex: Tallow--It's What's for Dinner

Commodities: Action in the Grease/Tallow/Lard Complex--"Tallow Replaces Crude Oil as Biofuels Go to War"

John Maynard Keynes: Money Manager (Couldn't Trade Lard to Save His Life)