There’s more than one way to invest in copper. In addition to buying shares of copper stocks, investors can gain exposure to the red metal through a copper ETF or ETN.
For the uninitiated,
exchange-traded funds
(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, an ETF can track specific groups of copper-focused companies, as well as
copper futures
contracts or even
physical copper
.
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Exchange-traded notes (ETNs) are similar to ETFs in that they track an underlying asset and trade like stocks on an exchange, but they do have differences.
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. Their main disadvantage is that investors risk total default if an ETN’s underwriter goes bankrupt.
The
copper price
is rising on structural supply deficits and strong copper demand fundamentals, and many investors are wondering how to take advantage of good news in the copper market.
Here the Investing News Network presents two copper ETFs and one copper ETN that may be worth considering. All data was accurate as of closing on September 2, 2020.
Copper ETFs
1. United States Copper Index Fund (ARCA:
CPER
)
The United States Copper Index Fund aims to give investors exposure to a portfolio of copper futures without using a commodity futures account. It 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.
Year-to-date, the fund is up 6.77 percent, at US$18.73.
2. Global X Copper Miners ETF (ARCA:
COPX
)
The Global X Copper Miners ETF is up 11.92 percent year-to-date, trading at US$22.60.
The fund tracks the Solactive Global Copper Miners Index, which covers copper exploration companies, developers and producers. Some of the top holdings in the fund include Ivanhoe Mines (TSX:
IVN
,OTCQX:IVPAF), KGHM Polska Miedz (WSE:
KGH
) and Freeport-McMoRan (NYSE:
FCX
).
Copper ETN
3. iPath Series B Bloomberg Copper Subindex Total Return ETN (ARCA:
JJC
)
The iPath Series B Bloomberg Copper Subindex Total Return ETN tracks the Dow Jones-UBS Copper Subindex Total Return. The note has seen an increase of 5.71 percent year-to-date, and is currently sitting at a price of US$45.91.
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.
