Copper exchange-traded funds (ETFs) are designed to track the price of copper, an industrial metal with 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. Because of 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. In the past year, the price of copper has lagged behind the broader market. The 1-year price change for copper is 10.0%, as compared with 1-year trailing total returns of 19.5% for the S&P 500.
- The price of copper has underperformed relative to the broader market in the past year.
- The copper ETFs with the best 1-year trailing total returns are CPER and JJC.
- The sole holding of each of these ETFs is copper.
The copper ETF universe is comprised of just 2 ETFs, excluding inverse and leveraged ETFs. The best performing copper ETF is the United States Copper Index Fund (CPER). Below, we look at both copper ETFs, ranked according to their 1-year trailing total returns. All numbers in this story are as of August 17, 2020.
ETFs with very low assets under management (AUM), less than $50 million, usually have lower liquidity than larger ETFs. This can result in higher trading costs which can negate some of your investment gains or increase your losses.
- 1-Year Trailing Total Returns: 11.6%
- Expense Ratio: 0.80%
- Annual Dividend Yield: N/A
- 3-Month Average Daily Volume: 68,017
- Assets Under Management: $36.6 million
- Inception Date: November 15, 2011
- Issuing Company: USCF
CPER is structured as a commodity pool, a private investment structure that combines investor contributions in order to trade commodity futures contracts. These pools are used 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 3-month U.S. Treasury Bills. CPER invests exclusively in copper futures.
- 1-Year Trailing Total Returns: 11.3%
- Expense Ratio: 0.45%
- Annual Dividend Yield: N/A
- 3-Month Average Daily Volume: 7,511
- Assets Under Management: $17.4 million
- Inception Date: January 17, 2018
- Issuing Company: Barclays Capital
JJC is structured as an exchange-traded note (ETN), a type of unsecured debt that tracks an underlying index of securities and trades like a stock. The index tracked by JJC is the Dow Jones-UBS Copper Subindex Total Return, which is tied to the Copper High Grade futures contracts traded on the COMEX. Like CPER above, JJC invests exclusively in copper futures.