Copper Market Investment Opportunities: Top US Copper ETFs & ETNs

Structural supply shortages and robust demand fundamentals are expected to lead to a long-term surge in copper prices. The use of copper in electrical equipment and industrial machinery coupled with global economic growth typically boosts demand and subsequently elevates copper prices. The development of green energy, particularly in electric vehicles, wind power, and solar energy, provides additional potential for this metal.

Aside from direct investments in this commodity and copper mining stocks, there are other options available for investors interested in the copper market, such as Copper Exchange-Traded Funds (ETFs) and Copper Exchange-Traded Notes (ETNs). Such ETFs and ETNs provide exposure to the copper market through various means, including tracking copper industry companies, copper futures contracts, or physical copper.

These investment options provide diverse ways for investors to participate in the potential growth of the copper market while also reflecting the current dynamics of the industry.

Selected U.S. Copper ETFs and ETN (Data as of April 23, 2024):

• Global X Copper Miners ETF (AUM: $21.2 billion): The Global X Copper Miners ETF（ARCA:COPX） tracks the Solactive Global Copper Miners Index, covering copper exploration companies, developers, and producers. The fund has an expense ratio of 0.65% and currently holds 37 stocks, with significant holdings including Ivanhoe Mines Ltd (TSX: IVN) (OTCQX: IVPAF), Lundin Mining Corp (TSX: LUN) (OTC Pink: LUNMF), and Southern Copper Corp (NYSE: SCCO).

• United States Copper Index Fund (AUM: $193.37 million): The United States Copper Index Fund (ARCA: CPER) tracks copper futures contracts, specifically the performance of the SummerHaven Copper Index Total Return (INDEXNYSEGIS: SCITR), which selects copper futures contracts monthly. The fund has an expense ratio of 0.65%.

• iShares Copper And Metals Mining ETF (AUM: $15.03 million): The iShares Copper and Metals Mining ETF (NYSE: COPX) tracks the STOXX Global Copper and Metals Mining Index, with an expense ratio of 0.47%. Over 31% of the 35 holdings are from Canada, with nearly 12% from Australia and 11% from the United States. Major holdings include Freeport-McMoRan Inc (NYSE: FCX), Southern Copper, Ivanhoe, and the major miner BHP Group (NYSE: BHP).

• Sprott Copper Miners ETF (AUM: $21.30 million): According to Sprott Asset Management, the newly established Sprott Copper Miners ETF (NASDAQ: COPP) in March 2024 focuses on large, medium, and small-cap copper mining companies. The fund has an expense ratio of 0.65% and tracks 40 constituent stocks, with over 33% of companies from Canada, nearly 33% from the United States, and 11% from Chile. Major holdings include Freeport-McMoRan, Antofagasta (OTC Pink: ANFGF), and Southern Copper.

• Sprott Junior Copper Miners ETF (AUM: $8.63 million): The Sprott Junior Copper Miners ETF (NASDAQ: COPJ), established in February 2023, focuses on small-cap copper miners, with an expense ratio of 0.75%. With 40 stock holdings, over 55% are from Canada, 21% from Australia, and 6.5% from Peru. Major holdings include Taseko Mines Ltd (TSX: TKO) (NYSEAMERICAN: TGB) and Compania de Minas Buenaventura SAA (NYSE: BVN).

• iPath Series B Bloomberg Copper Subindex Total Return ETN (AUM: $37.97 million): The iPath Series B Bloomberg Copper Subindex Total Return ETN (ARCA: JJC) tracks the Bloomberg Copper Subindex Total Return. It is the only option if investors do not want to invest in physical copper or mining companies and has the lowest expense ratio of 0.45%. Unlike ETFs, ETNs do not own the underlying assets and function similarly to unsecured bonds, allowing investors to sell notes for profit or hold them until maturity.

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