2 Copper ETFs for Q4 2022

JJC and CPER are the 2 copper ETFs for Q4 2022

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.

Key Takeaways

  • Copper futures have underperformed the broader market over the past year.
  • The two copper exchange-traded funds (ETFs), ranked by one-year trailing total returns, are JJC and CPER.
  • The holdings of each of these ETFs are various copper futures contracts.

Only two distinct copper ETFs trade in the United States, excluding inverse or leveraged funds as well as those with under $50 million in assets under management (AUM). These ETFs track the price of copper and do not invest in copper mining companies.

Copper futures prices, as measured by the S&P GSCI Copper Index, have fallen 12.9% over the past 12 months. By comparison, the S&P 500 posted a total return of -2.5% over the same period. These performance figures are as of Aug. 17, 2022.

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 two copper ETFs below. All numbers are as of Aug. 17, 2022. In order to focus on the funds' investment strategy, the top holdings listed for each ETF exclude cash holdings and holdings purchased with securities lending proceeds except under unusual cases, such as when the cash portion is exceptionally large.

iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC)

  • Performance Over One Year: -15.2%
  • Expense Ratio: 0.45%
  • Annual Dividend Yield: N/A
  • Three-Month Average Daily Volume: 26,066
  • Assets Under Management: $69.9 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 characteristics similar to those of bonds, but they do not make periodic interest payments.

JJC 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 futures contracts on copper. It may be appealing as an inflation hedge. JJC invests exclusively in copper futures.

Because the ETN is linked to an index composed of futures contracts on a single commodity, the ETN is less diversified than other funds. As a result, the ETN can therefore experience more volatility than other kinds of funds or investments.

United States Copper Index Fund (CPER)

  • Performance Over One Year: -16.1%
  • Expense Ratio: 0.88%
  • Annual Dividend Yield: N/A
  • Three-Month Average Daily Volume: 148,158
  • Assets Under Management: $149.9 million
  • Inception Date: Nov. 15, 2011
  • Issuer: Marygold Cos, Inc.

CPER is an ETF that is structured as a commodity pool, a private investment structure that combines investor contributions to trade commodity futures contracts. These commodity pools act as a single entity to increase leverage in trading with the goal of maximizing profits.

CPER 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 three-month U.S. Treasury bills.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources
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  1. VettaFi. "ETF Screener."

  2. YCharts. "Financial Data."

  3. Barclays, iPath Exchange Traded Notes. "iPath® Series B Bloomberg Copper Subindex Total Return℠ ETN."

  4. VettaFi. "JJC: iPath Series B Bloomberg Copper Subindex Total Return ETN."

  5. USCF. "CPER: United States Copper Index Fund."

  6. VettaFi. "CPER: United States Copper Index Fund."

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