2 Two copper ETFs in the first quarter of 2022

The Copper Exchange Traded Fund (ETF) aims to track the price of copper, an industrial metal widely used in manufacturing, electronics and construction. Copper is considered a cyclical commodity, and its price fluctuates with the economic cycle, rising when the economy grows, and falling when the economy slows. Due to its widespread use, some investors use copper and other commodities to diversify their investment portfolios. As the price of copper rises when inflation accelerates, the metal is also seen as a tool to hedge against rising prices.

Key points

  • In the past year, copper futures outperformed the market.
  • The two copper ETFs ranked by one-year tracking total return are JJC and CPER.
  • The holdings of each of these ETFs consist entirely of copper futures contracts.

There are two different types of copper ETFs traded in the United States, excluding leveraged and inverse funds, and those with less than $50 million in assets under management (AUM). These ETFs track copper prices and do not invest in copper mining companies.

As of November 8, 2021, copper futures prices as measured by the Standard & Poor’s GSCI Copper Index have risen by 39.7% in the past 12 months. In contrast, the S&P 500’s total return over the same period was 35.9%. Based on the performance of the past year, the best copper ETF is the iPath Series B Bloomberg Copper Sub-Index Total Return ETN (JJC). We check the two copper ETFs below. All figures are as of November 8, 2021.

  • Performance over one year: 38.3%
  • Expense rate: 0.45%
  • Annual dividend yield: Not applicable
  • Three-month average daily volume: 29,506
  • Assets under management: US$78.9 million
  • Date of Establishment: January 17, 2018
  • Issuer: Barclays Capital

The structure of JJC is an exchange-traded note (ETN), which is an unsecured debt instrument that can track the underlying index of securities and trade like stocks. ETNs have similar characteristics to bonds, but they pay interest irregularly. JJC aims to provide exposure to the total return of the Bloomberg Copper Sub-Index, which reflects the return that may be obtained through unlevered investment in copper futures contracts. It may be attractive as an inflation hedge. JJC invests exclusively in copper futures.

  • Performance over one year: 37.7%
  • Expense rate: 0.80%
  • Annual dividend yield: Not applicable
  • Three-month average daily volume: 262,429
  • Assets under management: $286.9 million
  • Date of establishment: November 15, 2011
  • Publisher: Concierge Technologies

CPER is an ETF structured as a commodity pool. It is a private investment structure that combines investor contributions to trade commodity futures contracts. These commodity pools act as a single entity to increase trading leverage to maximize profits. CPER attempts to track the total return of the SummerHaven Copper Index, which aims to reflect the return performance of a portfolio of copper futures contracts fully secured by three-month U.S. Treasury bills.

The comments, opinions and analysis expressed here are for reference only and should not be regarded as personal investment advice or advice on investing in any securities or adopting any investment strategy. Although we believe that the information provided here is reliable, we do not guarantee its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Due to the rapidly changing market and economic conditions, all comments, opinions and analyses contained in our content are presented on the date of publication and may change without notice. This material is not intended to provide a complete analysis of every important fact about any country, region, market, industry, investment or strategy.

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