What this ETF is trying to do

The PowerShares DB Gold Double Short ETN (DZZ) is an inverse fund. This means it is designed to move in the opposite direction of its target asset. Specifically, it seeks to provide a return based on the decline of gold prices. Because it is an inverse fund, it is generally used by investors who believe the price of gold will go down.

What the numbers show

The current price of DZZ is $1.75. Looking at the historical performance, the results have been mixed over different timeframes:

• Year-to-Date (YTD): The price return is -54.56%.

• One Year: The price return is 16.07%.

• Three Year: The price return is -37.23%.

• Five Year: The total return is -39.92%.

An estimated price from roughly one year ago was $1.50. Because this fund does not pay distributions, the price return and the total return are the same.

Income and distribution explanation

DZZ does not provide regular income to investors. The data shows a distribution yield of 0%, and no distributions were detected over the last 12 months. This fund is not designed for investors seeking monthly or annual cash payments.

NAV erosion explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

Based on price-based evidence, the erosion score is 100, and the erosion severity is labeled as "good." The data indicates that no price erosion has been detected, and the severe erosion-risk flag is false.

Pros

• Inverse Opportunity: It allows investors to potentially profit if the price of gold falls.

• Recent Growth: The fund saw a positive price return of 16.07% over the last year.

Cons

• High Volatility: The fund has seen significant losses in other timeframes, such as a -54.56% return year-to-date.

• No Income: There are no cash distributions for investors.

• Long-term Decline: The three-year and five-year returns are both negative.

Beginner takeaway

DZZ is a specialized tool used to bet against the price of gold. It is not a traditional "buy and hold" investment for long-term growth or income. While it has gained value over the past year, it has lost significant value over the last few days/months (YTD) and over the last five years. Investors should remember that inverse funds can be very risky and are often used for short-term strategies rather than long-term savings.