Copper exchange-traded funds (ETFs) are designed to track the price of copper, an industrial metal used in a wide variety of applications in manufacturing, electronics, and construction. Copper is considered a cyclical commodity whose price fluctuates in tandem with economic cycles, 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 portfolios. Because copper rises when inflation is accelerating, the metal is also seen as a hedge against rising prices.
- Copper prices have dramatically outperformed the broader market in the past year.
- The 2 copper ETFs, ranked by 1-year trailing total returns, are JJC and CPER.
- The sole holding of each of these ETFs is copper futures.
There are 2 distinct copper ETFs that trade in the U.S. These ETFs track the price of copper and do not invest in copper mining companies. Copper prices have risen 93.9% over the past 12 months, as of May 5, 2021. By comparison, the S&P 500 has posted a total return of 49.0%, as of May 4, 2021. The best copper ETF, based on performance over the past year, is the iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC). We examine the 2 copper ETFs below. All numbers below are as of May 5, 2021.
- Performance over 1-Year: 90.9%
- Expense Ratio: 0.45%
- Annual Dividend Yield: N/A
- 3-Month Average Daily Volume: 24,053
- Assets Under Management: $71.5 million
- Inception Date: Jan. 17, 2018
- Issuer: Barclays Capital
JJC is structured as an exchange-traded note (ETN), a type of unsecured debt instrument that tracks an underlying index of securities and trades like a stock. ETNs share similar characteristics to bonds but they do not make periodic interest payments. The fund is designed to provide exposure to the Bloomberg Copper Subindex Total Return, which reflects the returns that are potentially available through an unleveraged investment in the futures contracts on copper. It may be appealing as an inflation hedge. JJC invests exclusively in copper futures.
- Performance over 1-Year: 88.5%
- Expense Ratio: 0.76%
- Annual Dividend Yield: N/A
- 3-Month Average Daily Volume: 296,605
- Assets Under Management: $261.1 million
- Inception Date: Nov. 15, 2011
- Issuer: USCF
CPER is an ETF that is structured as a commodity pool, a private investment structure that combines investor contributions in order to trade commodity futures contracts. These commodity pools act as a single entity in order to increase leverage in trading with the goal of maximizing profits. The ETF seeks to track the SummerHaven Copper Index Total Return, which is designed to reflect the performance of the returns from a portfolio of copper futures contracts that are fully collateralized by 3-month U.S. Treasury Bills. Like JJC above, CPER provides exposure to one of the oldest metals by investing exclusively in copper futures.
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