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6 Copper ETFs and ETNs
There’s more than one way to invest in copper. In addition to copper stocks, investors can gain exposure through copper ETFs and ETNs.
There’s more than one way to invest in copper. In addition to buying shares of copper stocks, investors can gain exposure through copper exchange-traded funds (ETFs) or copper exchange-traded notes (ETNs).
For the uninitiated, ETFs are securities that trade like stocks on an exchange, but track an index, commodity, bonds or a basket of assets like an index fund. In the case of base metal copper, there are various options — an ETF can track specific groups of copper-focused companies, as well as copper futures contracts or even physical copper.
ETNs also track an underlying asset and trade like stocks on an exchange, but they differ from ETFs in some ways. Specifically, ETNs are more like bonds — they are unsecured debt notes issued by an institution, and can be held to maturity or bought and sold at will. The main disadvantage to be aware of is that investors risk total default if an ETN’s underwriter goes bankrupt.
The copper outlook is strong due to structural supply deficits and positive copper demand fundamentals, and many investors are wondering how to take advantage of this good news in the copper market.
Here the Investing News Network presents five copper ETFs and one copper ETN that may be worth considering. All data was current as of April 23, 2024.
1. Global X Copper Miners ETF (ARCA:COPX)
Assets under management (AUM): US$2.12 billion
The Global X Copper Miners ETF tracks the Solactive Global Copper Miners Index, which covers copper exploration companies, developers and producers. The fund has an expense ratio of 0.65 percent
COPX currently has 37 holdings, of which the top holdings include Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF), Lundin Mining (TSX:LUN) and Southern Copper (NYSE:SCCO).
2. United States Copper Index Fund (ARCA:CPER)
AUM: US$193.365 million
The United States Copper Index Fund aims to give investors exposure to a portfolio of copper futures without using a commodity futures account. It also has an expense ration of 0.65 percent.
The fund tracks the performance of the SummerHaven Copper Index Total Return (INDEXNYSEGIS:SCITR), which is calculated based on certain copper futures contracts selected on a monthly basis.
3. iShares Copper and Metals Mining ETF (NASDAQ:ICOP)
AUM: US$15.034 million
The iShares Copper and Metals Mining ETF tracks the investment results of the STOXX Global Copper and Metals Mining Index which is composed of publicly-listed companies primarily engaged in copper and metal ore mining. The fund has an expense ratio of 0.47 percent.
More than 31 percent of ICOP's 35 holdings are based in Canada, while nearly 12 percent call Australia home and 11 percent are in the United States. Its top holdings include Freeport-McMoRan (NYSE:FCX), Southern Copper, Ivanhoe and BHP (ASX:BHP,NYSE:BHP,LSE:BHP).
4. Sprott Copper Miners ETF (NASDAQ:COPP)
AUM: US$21.3 million
Sprott Asset Management bills its newly launched Copper Miners ETF as "the only pure-play ETF focused on large-, mid- and small-cap copper mining companies that are providing a critical mineral necessary for the clean energy transition". Having come to market in March 2024, this fund has an expense ration of 0.65 percent.
COPP tracks 40 constituents, with more than 33 percent based in Canada, another nearly 33 percent in the United States, and nearly 11 percent located in Chile. Its top holdings include Freeport-McMoRan, Antofagasta (LSE:ANTO) and Southern Copper.
5. Sprott Junior Copper Miners ETF (NASDAQ:COPJ)
AUM: US$8.63 million
Launched in February 2023, the Sprott Junior Copper Miners is a pure-play ETF that as the name suggests is focused on small copper miners. It does have the largest expense ratio (0.75 percent) of the funds on this list.
Of its 40 holdings, more than 55 percent are call Canada home, another 21 percent are in Australia and 6.5 percent are based out of Peru. COPJ's top three holdings are Taseko Mines (NYSE:TGB), Hudbay Minerals (NYSE:HBM) and Compania de Minas Buenaventura (NYSE:BVN).
6. iPath Series B Bloomberg Copper Subindex Total Return ETN (ARCA:JJC)
AUM: US$37.97 million
The iPath Series B Bloomberg Copper Subindex Total Return ETN provides exposure to the Bloomberg Copper Subindex Total Return. According to ETF Database, "For investors seeking exposure to copper beyond physical exposure or through a mining firm, JJC is the only pure play choice available." It has the lowest expense ration on this list, coming in at 0.45 percent.
Unlike an ETF, an exchange-traded note or ETN does not own the underlying asset. Instead, an ETN functions in the same way as an uninsured bond. According to Investopedia, investors take their profits when they sell the note or it reaches maturity.
This is an updated version of an article originally published by the Investing News Network in 2015.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor's degree in English education as well as a master's degree in the teaching of writing, both from Humboldt State University, California.
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COMMODITIES
Commodities | |||
---|---|---|---|
Gold | 2322.97 | -0.71 | |
Silver | 27.25 | -0.03 | |
Copper | 4.48 | +0.02 | |
Oil | 82.91 | -0.45 | |
Heating Oil | 2.56 | -0.02 | |
Natural Gas | 1.65 | -0.16 |
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Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor's degree in English education as well as a master's degree in the teaching of writing, both from Humboldt State University, California.
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