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 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. Read on to learn more about these vehicles.
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.
AUM: US$193.37 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.
AUM: US$15.03 million
The iShares Copper and Metals Mining ETF tracks the STOXX Global Copper and Metals Mining Index, which is composed of public companies primarily engaged in copper and metal mining. The fund has an expense ratio of 0.47 percent.
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.
AUM: US$8.63 million
Launched in February 2023, the Sprott Junior Copper Miners is a pure-play ETF that, as its name suggests, is focused on small copper miners. It has the largest expense ratio (0.75 percent) of the funds on this list.
AUM: US$37.97 million
This is an updated version of an article originally published by the Investing News Network in 2015.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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