Copper is a commodity that performs per the fluctuations from the market. Prices of this industrial metal go up and down with economic cycles. The past year has been unique as the Corona Virus has directly affected construction negatively. There are specific sectors of the economy that are beginning to open up with the “new normal” for the world. This change allows for an increase in social interaction in which business activity increases. Copper costs are driven by supply and demand. The recent lull in the activity of industries using copper has established a period of lower demand, but things are changing. Copper exchange-traded funds track prices from the widely used industrial metal. It represents a far more stable investment strategy within the copper market. Although there are some strategies for investing in copper, ETFs provide a bit less volatility than the more direct stock investments. Listed here are 5 copper ETFs to consider for diversifying your portfolio.
5. the United States Copper Fund Index (CPER)
The Usa Copper Index Fund is really a private commodity pool investment design. Investor contributions are utilized for trading commodity futures contracts with a focus on maximizing profits through leveraged trading. It tracks the SummerHaven Copper Index Total Return, reflecting performance from the copper futures portfolio. The futures contracts are backed by US treasury bills with three-month durations. The contracts maintain exclusivity in copper futures. The USCF is the issuing company formed on November 15, 2011, with $36.6 million in assets under its management and an 11.6% 1-year trailing total returns, according to Investopedia. It’s ranked as one of the top-performing copper ETFs with a pure focus that excludes the combination of other commodity interests.
4. Global X Copper Miners ETF (COPX)
COPX operates as a replication of the Solactive Global Copper Miners Index, made up of common stocks, GDRs, and ADRs of some global companies within the mining industry of the copper market. The approach that this ETF takes is equity-based in contact with copper. This fund makes investments in copper mining entities with exclusivity in copper that offers a narrower portfolio that is-copper-centric according to the ETF Database. The COPX ETF comes with an AUM of $93.6 million. The fee charged is 65 basis points annually. The trading volume is approximately 64,000 shares heralding a 19.2% return in 12 months. It provides investors exposure to copper mining companies and it is useful for portfolio diversification with no broad approach of including other commodities interests.
3. First Trust Global Copper Index (CU)
CU invests in the stocks of businesses that are active within the copper mining industry. This strategy is an indirect approach to copper investment. The underlying securities of CU are composed of companies that are not only involved in copper. Precious metals also for a more diverse and broad portfolio approach. The appeal of CU is that it takes an equity approach that contributes exposure to copper without the negative associations of future based strategies. The location price of metals correlates strongly to the profitability of the included businesses that are dependant on copper prices. The weighting methods for fund distribution are linear and based on the revenue exposure to copper manufacture of each security. Commodities within the CU scope include copper, silver, gold, along with other metals.
2. iPath Dow Jones-UBS Total Return ETN (JJC)
JJC is the market’s oldest copper exchange-traded product. It is an ETN that exists on futures-based strategies with potential credit risks. It links straight to the Dow Jones UBS Commodity Subindex Total Return. The JJC is definitely an index made up of a single copper-centric futures contract. The process of this ETN by design exposes investors to changes that exist in the spot price of copper. Additionally, it includes the slope from the futures curve. It is an alternative way of tapping into the realm of copper futures contracts.
1. iPath Series B Bloomberg Copper Subindex Total Return ETN (JJCB)
According to Nasdaq.com, Barclays Capital established the JJCB ETN in January of 2021. The main focus of this ETN is to provide exposure to the copper futures price. It joined the industrial metal ETFs at a time when copper prices rallied to record-breaking highs. The driers for that demand of copper have spurred strong global economic growth in this sector, before Covid 19 restrictions. Copper is a metal that is useful in multiple industries within construction and manufacturing. Strong copper markets exist in sync with economic growth. The fund accomplishes two purposes. The first is to provide investors with exposure to copper prices. The second is to take an index of one copper futures contract at any given time. The AUM achieved a figure of $10.A million in just a few days of trading and also the fee charged is 45 basis points annually, beating the fees charged by COPX.
Any investment involves a danger of loss. The copper market is a commodity recommended for portfolio diversification. Using the ETF/ETN strategy into account allows for more rapid movement of funds, depending on the stipulations of the agreement. Some ETFs assign new contracts every month. Some others renew or invest in other copper futures contracts on a 3-month basis. While copper futures is really a volatile market, there is always an opportunity for investments to show a high yield. It’s a good idea to consider which aspect of the copper industry a particular ETF invests in when creating the decision about which to include in your investment portfolio. Some are copper-centric, while some take a broader approach to include firms that are involved with copper along with other metals for further diversification. Most offer reliable snapshots of performance in regards to the spot prices of metals, which are determined daily. You get a more precise resolution of the copper price at any given time. We chose the five ETFs above according to those that analysts give the highest marks for profitability.