7/6/2023 0 Comments Copper etf![]() ![]() Demand for copper has increased by 28% over the last decade, which has been driven by major infrastructure developments across the globe in countries such as India, China, and the United States,” Hannon said. “The global transition to renewable energy and EVs will require a lot of copper. The fund works by tracking the Solactive Global Copper Miners Total Return Index, which is designed to track the performance of companies that have or are expected to have significant exposure to the copper mining industry.īlair Hannon, Head of Investment Strategy, says copper is one of the world’s most versatile commodities and will remain a vital input for a multitude of future-focused industries thanks to its properties as an electricity and heat conductor and its corrosion resistance. WIRE provides access to a global basket of copper miners, which stand to benefit from being a key part of the value chain supporting growth in significant areas of innovation such as technology, infrastructure, and clean energy. Barnes says.Global X ETFs Australia (Global X) today announced the launch of the Global X Copper Miners ETF (ASX: WIRE) – the first of its kind in the country. Given the lack of options, investors can look to even more indirect plays on copper if they believe in the growth of clean-tech, Mr. As such, FactSet rates their closure risk as high, while COPX’s risk is low. Kashner of FactSet also notes that CPER and JJC are small funds, about $7-million and $14-million AUM respectively. He argues that both JJC and CPER are not buy-and-hold vehicles, as their underlying futures contracts are intrinsically short-term instruments. As such, individuals unfamiliar with commonly used terms for futures such as “contango” and “backwardation” may want to gain copper exposure by other means, Mr. Like JJC, CPER is likely a better fit for investors knowledgeable of futures trading. Its return in 2019 was almost 7 per cent, but since inception in 2011, CPER is down about 30 per cent. Its MER and bid/ask spread are also high, 0.8 and 0.25 per cent respectively. Tracking the performance of the SummerHaven Copper Index Total Return, CPER is designed to emulate the performance of a portfolio of futures contracts. Its return in 2019 was 5.66 per cent, the longest performance history available for the fund, which was launched in 2018. Additionally, its MER is 0.45 per cent with a bid/ask spread of 0.4 per cent. ![]() The difference is an ETN is packaged as a loan to the bank and can involve counterparty risk. ![]() “The major trade-off is it has perfect tracking to the commodity, like total-return-swap ETFs.” It also differs in structure as an exchange-traded note (ETN).Ī debt-structured product, JJC “has a component of credit risk to it,” explains Mr. The investment provides exposure to the Bloomberg Copper Subindex Total Return. The next-largest choice by AUM, JJC is a play on copper futures contracts. iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC) Since its inception in 2010, however, COPX is down more than 41 per cent. Its performance in 2019 was about 12 per cent, along with a yield of 1.63 per cent. Yet it’s the largest of the three options for copper exposure, which points to a lack of investor demand. With about $84-million in assets under management (AUM), COPX is small compared with its gold counterparts. Additionally, its spread of 0.36 per cent is also higher than the average for even commodity-based ETFs, which typically have a bid/ask spread of 0.07 per cent, she adds. Providing access to a diversified basket of about 30 miners, its management expense ratio (MER) is relatively high at 65 basis points per year.īy contrast, many gold ETFs have MERs of less than 30 basis points, Ms. Yet unlike the others, which track the futures market, the ETF is a play on global copper producers. Like the other two choices, COPX trades on the New York Stock Exchange. ![]()
0 Comments
Leave a Reply. |