A List of Copper ETFs and ETNs
Invest in Copper With These ETPs
Most people first think of gold or silver when it comes to precious metals, but they don't usually think of copper. But copper is now a more popular precious metal than ever before. People scavenge abandoned buildings and strip the wires and pipes for the metal. Pennies were once made of steel because copper was in short supply.
But you might feel that it's overplayed even though others believe that copper is a hot commodity. Whatever your opinion, bullish or bearish, it's an investment opportunity for you. And what easier way to give your portfolio exposure to the copper market than a copper ETF or ETN?
Whether you're looking to hedge risk, invest in copper, or diversify your portfolio, copper funds, and notes give you instant access to the copper sector along with their many benefits, such as the tax advantages.
There are three primary copper ETFs and ETNs on the market as of 2017.
CPER - United States Copper Index ETF
The U.S. Copper Index Fund tracks the Summer Haven Copper Index Total Return Index which focuses on risk-adjusted returns on a portfolio of copper futures contracts. The index includes two to three eligible copper futures contracts that are selected on a monthly basis based on quantitative formulas relating to the prices of the Eligible Copper Futures Contracts developed by Summer Haven Indexing.
CUPM - iPath Pure Beta Copper ETN
Our first copper ETN on the list comes from Barclay’s iPath, which correlates with the Barclays Copper Pure Beta Total Return Index. Like CPER, the exchange-traded note utilizes futures contracts in the copper markets to emulate its benchmark. And according to iPath, the Index may roll into one of a number of futures contracts with varying expiration dates, as selected using the Barclays Pure Beta Series 2 Methodology.
JJC - iPath DJ-UBS Copper Total Return Sub-Index ETN
This is another copper ETN from Barclay’s iPath, but this one is linked to the Dow Jones-UBS Copper Sub Index Total Return. Like CUPM, this copper ETN utilizes futures contract on the commodity of copper, currently the Copper High-Grade futures contract traded on the COMEX, which is included in the Dow Jones-UBS Commodity Index Total Return.
The Bottom Line
So there's your list of copper ETFs and ETNs for 2017. If you click on any of these copper funds or notes, the link will take you to a fact sheet that gives you a little more information about each product. You have some nice choices here if you feel copper is a strong commodity because it's used in so many different products like coins.
No investment asset is risk-free, so make sure you understand the disadvantages, limitations, and reactions of each product to different market conditions before you buy. It might also make sense to look under the hood to see what's in your ETF, such as derivatives like futures, options, or forwards.
Be sure to consult a financial professional if you have any questions about any of the above copper ETFs or ETNs. And when you're confident in your decision, good luck!
Disclaimer: I have no positions in any of the copper exchange-traded products at the time of this publication.