DAG (DB Agriculture Double Long ETN) is broken

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#1 Thu, Sep 29, 2011 - 11:37am
Fleve
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DAG (DB Agriculture Double Long ETN) is broken

Just a quick notice for anyone who plans to enter the grains market through DAG. Don't. Go and get something else, ANYTHING else.

For those who don't know, DAG is an ETN that supposedly tracks wheat, soybeans, corn and sugar, each at about 25%, and is supposed to offer leveraged performance at x 2 on a monthly basis (which is, of course, different from a daily basis, especially more annoying and less transparent). Lately it doesn't do anything remotely like that, at all.

A few days ago, DAG should've gone up by 3%, instead it plunged by 5%. Today, right now, on 29 September, 17.21 GMT+1, it should have gone up by about 3.96%. (Corn is up 0.22%, soy up 0.57%, wheat 1.66%, and sugar an amazing 5.47%) Meanwhile, DAG is currently DOWN 2 cents or 0.17%. A few percentages off target I can get, but going down while the underlying is going up, by massive amounts, that's too much.

For anyone who is already in DAG and wants to get out, I'd try to get out in the morning, just when the market opens. For some reason there's often a price spike there, which lately has been the highest DAG will amount to for the day. Perhaps I'm wrong here, but whenever DAG was supposed to go up lately, it either plunged or didn't perform as it was supposed to. Also, liquidity is an enormous issue with this stock, often retaining a ridiculous spread throughout the trading day. This probably has something to do with the fact that Deutsche Bank has suspended issuance of new shares of DAG at the beginning of this year. (google it for more info)

As an aside, AGA, the double short version of DAG, also run by DB, hasn't shown any of these problems and has so far performed quite well. But for anyone wanting to go long in the hopes of seeing new highs in the grains and sugar, go get some other ETF. RJA, JJG, JJA, GRU, or DBA all perform more adequate, though I can't or won't vouch for them personally. At least they're in the green when their underlying stuff is green. DAG is just complete bullshit lately.

Edited by: Fleve on Nov 8, 2014 - 5:18am
Sun, Apr 8, 2012 - 7:32pm
enusuancy
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Estepona
Joined: Oct 29, 2011
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thank you

good day Your site is very helpful... Thank you...

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