Please evaluate the Power share ETFs namely DGL versus GLD and DBS versus SLV.

Please evaluate the Power share ETFs namely DGL versus GLD and DBS versus SLV.Thank you and stay well. Mort

Please evaluate the Power share ETFs namely DGL versus GLD and DBS versus SLV.Thank you and stay well. Mort

mort,

haven't seen you around here before - that I can recall anyway.

Here is a link for the silver factcard:

http://www.dbfunds.db.com/Dbs/Pdfs/DBS_Fact_Sheet.pdf

Here is the gold:

http://www.dbfunds.db.com/Dgl/Pdfs/DGL_Fact_Sheet.pdf

From what I can see, the DB etf's track the commodity through futures contracts PLUS you get some yield that you don't get in slv or gld.

Kaimu will probably chime in on the futures vs. physical issue.

Mort, why don't you give us your thoughts...

thanks

Does anyone know the capital gain tax implications for these etf's? Are they treated as precious metals (collectibles) are treated? Could be a benefit if they are not.

BHP Billiton

The BHP Billiton struck me as interesting. Delighted on the one hand about such a large buyback. For those who don't know the company initiated a $10 billion buyback. On the other hand is the company signaling that its best and highest use of cash is a buyback (say vs. long term capital spending)? Just wondering...

Cheers,

GLD SLV are still 'collectibles' is what i've read since they arrived
http://www.jeffshoward.com/tax-planning/taxation-gld-vs-miners.asp

DGL DBS trading so few shares daily, better stay away from those

go34, the DB commodity ETF's are not treated as collectables.

The interesting question is whether the IRS will accept DB's argument that they should be treated as grantor trusts, thus avoiding the straight 60/40 cap-gain rule. Right now, DB is acting as if this is accepted and sending out letters and, I assume, K-1 forms to all fund holders. I haven't received one yet but I assume it will indicate some percentage of gain should be treated as return of capital rather than as a dividend or capital gain.

Don't know if any of these have been around enough to figure out whether the yield advantage of the futures-based funds will prove superior to the physical advantage -- a battle between the erosion of contango and carry cost other things being equal (which they usually aren't) -- and would like to hear some opinion on that myself.

FWIW, the situation with ETN's is getting even more interesting. For example, iPath is arguing their DJ-AIG commodity fund (DJP) should be treated as a contract rather than a debt security so, assuming I understand their argument correctly, all gains should be deferred until either sale or term.