Metals ETFs: Investing in Base and Industrial Metals

Workers in a steel factory
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There's no doubt that gold and precious metals get most of the attention when it comes to metals. That's true for the average person walking down the street, and it's true for the average investor, as well. Investors flock to gold exchange-traded funds (ETFs) and precious metals ETFs as relatively safe investments when market volatility spikes. However, that doesn't mean investors should forget about the "other" metals ETFs.

Base metals and industrial metals are important commodities in sectors such as construction and technology, so they shouldn't be ignored. Whether you are looking to diversify your portfolio or seize a perceived opportunity with metal commodities, you should consider metals ETFs for your investing strategy.

Key Takeaways

  • You have a wide variety of metals ETFs to choose from if you're interested in metals investing.
  • Metals ETFs can track metals commodities, exploration, or distribution of metals.
  • Metals ETFs can help you diversify your portfolio or find new investing opportunities.

Breaking Down Industrial Metals ETFs

There are quite a few different metals ETFs to consider for your portfolio. They can vary by region, utilize different investment strategies, or specialize in a specific type of metal.

Like any type of ETF, these products allow investors to enter specific sectors or invest in certain markets without loading up on equities or battling index basket pricing. Instead, you can get instant exposure to your desired market with one easy transaction.

Some metals funds target metals as commodities, using futures to track the underlying target assets—other ETFs target company stocks involved in the mining, exploration, or distributing of metals. There are also inverse and ​leveraged metals ETFs, which use advanced strategies to either short or outperform the underlying index in the near term.

International metals ETFs allow investors to add exposure from different countries. Metals exchange-traded notes (ETNs) offer a similar investment product as ETFs but with some key differences.

List of Base and Industrial Metals ETFs and ETNs

As with any investment—a company stock, mutual fund, ETF, or otherwise—please make sure you thoroughly research these products before placing any trades on them (either long or short). Conduct your due diligence and watch how these funds react to different market conditions. Additionally, look under the ETF's hood and see what is in the funds.

Furthermore, ETFs and ETNs are constantly in flux. The name, ticker symbol, investment goals, or holdings in these products could change.

ETFs have many advantages, but they have disadvantages, as well (as does any investment). It is important to understand the investment vehicle before you trade it. If you have any questions or concerns, make sure you consult a stockbroker, a financial advisor, or another financial industry professional.

With those disclaimers out of the way, here's a list of industrial metals ETFs and ETNs to kickstart your research:

  • CPER: United States Copper Index Fund
  • DBB: Invesco DB Base Metals Fund
  • JJMTF: iPath Bloomberg Industrial Metals Subindex Total Return ETN
  • JJCTF: iPath Bloomberg Copper Subindex Total Return ETN
  • PICK: iShares MSCI Global Metals & Mining Producers ETF
  • REMX: VanEck Vectors Rare Earth/Strategic Metals ETF
  • RJZ: ELEMENTS Rogers International Commodity Index Metals Total Return ETN
  • SLX: VanEck Vectors Steel ETF
  • UCIB: ETRACS CMCI Total Return ETN Series B
  • XME: SPDR S&P Metals & Mining ETF

Frequently Asked Questions (FAQs)

Does Vanguard have a gold ETF?

Vanguard doesn't have a gold or precious metals ETF, but the Vanguard Materials ETF (VAW) holds a wide range of stocks of companies in the materials sector.

Is there a precious metals ETF?

There are several precious metals ETFs you can choose from, such as SPDR Gold Shares. iShares and Aberdeen also have metals ETFs.

What metals are in the PICK ETF?

iShares MSCI Global Metals & Mining Producers ETF (PICK) doesn't hold physical metals; it holds stocks of companies listed on the MSCI ACWI Select Metals & Mining Producers Ex Gold & Silver Investable Market Index. PICK lists 217 companies involved in the extraction and production of metals and precious metals, excluding gold and silver.

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