After a rough year that saw prices dip by over 30%, copper futures are beginning to make a comeback. Investors who are interested in speculating on the copper market have a lot of options, but one of the easiest is through ETFs. (See also: What Factors Affect the Price of Copper?)
Here are the top 4 copper ETFs ranked by average trading volume as of December 13, 2016.
iPath Bloomberg Copper Subindex Total Return (JJC)
- Issuer: iPath
- Average Volume: 149,000 shares
- 2016 YTD Performance: 20.35%
- Expense Ratio: 0.75%
JJC is a fund that trades in copper high grade contracts. At an average volume of 149,000 shares, this is the most active copper fund available to investors. Compared to other precious metals, copper funds typically have a lower trade volume, but do enjoy good returns.
JJC exposes investors to the Dow Jones-UBS Copper Total Returns index, which represents returns in unleveraged copper futures. The fund, which is managed by iPath, has a history in the marketplace that stretches back to 2007.
The fund’s moderate expense ratio and middle-of-the-road performance indicates that it is conservatively managed when compared to competing funds. That’s partially because of its focus on unleveraged copper futures, as opposed to other funds, which hold a stake in copper mining securities or leveraged futures.
Global X Copper Miners ETF (COPX)
- Issuer: Global X
- Average Volume: 37,400 shares
- 2016 YTD Performance: 79.98%
- Expense Ratio: 0.65%
COPX is a moderate-volume ETF that focuses on copper mining securities as opposed to the futures prices of physical copper. That has enabled COPX to give investors a high return, as mining companies tend to be more volatile than copper futures. With good management, this fund delivered the highest return on investment in 2016 of any of the copper funds on our list.
Unlike JJC – which corresponds generally to the Dow Jones Copper Total Returns index – COPX more closely mirrors the Solactive Global Copper Miners Total Return index, which is a reflection of the securities prices of a selection of global copper mining firms.
COPX has only been in existence since 2010, and only been profitable for the past two fiscal years. But its returns speak for themselves, and the fund offers investors a tempting package of global copper mining securities.
US Copper Index ETF (CPER)
- Issuer: United States Commodity Funds LLC
- Average Volume: 7,000 shares
- 2016 YTD Performance: 18.36%
- Expense Ratio: 0.98%
CPER is a diversified fund that most closely follows the SummerHaven Copper Index Total Return. This fund holds $4.3 million in assets, and is diversified across US copper securities, with some futures contracts and bonds also held.
It’s a relatively low-volume ETF with a high expense ratio as compared to its returns. Like COPX, CPER is relatively new, having been in operation since late 2010. It’s a good choice for investors who prefer domestic copper holdings and are looking for a conservative, diversified fund.
iPath Pure Beta Copper (CUPM)
- Issuer: iPath
- Average Volume: 1,000 shares
- 2016 YTD Performance: 22.53%
- Expense Ratio: 0.75%
iPath’s Pure Beta Copper fund is a small, low-volume ETF with a slightly above-average expense ratio. The fund gives investors exposure to the Barclays Copper Pure Beta Return Index using primarily unleveraged contracts. CUPM uses Barclays Pure Beta Management 2 methodology to select futures contracts for inclusion.
CUPM holds less than $500,000 in total assets, making it less likely than some larger funds to be able to take advantage of market volatility with large positions. Accordingly, it has struggled in recent years to stay in the black, losing money in 2015 when larger funds turned a profit. In general, this is a good fund for investors who believe in the Barclays Pure Beta methodology and want to apply those concepts to the precious metals market. (See also: Investing In The Metals Markets.)