Barclays (LON:BARC) Capital launched a new fund on Jan 17, 2018, iPath Series B Bloomberg Copper Subindex Total Return ETN JJCB, focused on providing exposure to the price of copper futures.
Industrial metal ETFs have been in the spotlight lately and copper prices have been rallying to record highs. Strong global economic growth is driving demand for the red metal. Per IMF’s latest report, global economic growth is expected to hit 3.9% in 2018. Copper is widely used in construction as well as manufacturing activities. Therefore, strong price trends for copper supports market sentiments of robust economic growth.
Fund Characteristics
The fund seeks to provide exposure to the price of copper and seeks to track an index comprising a single copper futures contract at a time. The fund tracks the Bloomberg Copper Subindex Total Return index. Within few days of trading, the fund has amassed $10.1 million in AUM and charges a fee of 45 basis points a year.
How Does it Fit in a Portfolio?
This ETF is a good play for investors looking for some allocation to the industrial metal space by investing in copper. Copper prices have been touching all-time highs owing to strong demand for the metal from its biggest consumer, China. Moreover, requirements for charging stations to support the higher attention grabbed by electric cars in the future are expected to drive demand for copper higher.
This ETF seeks to provide diversification to a traditional asset portfolio by exposing investors to returns of the industrial metals space, which is closely aligned with the global manufacturing scenario.
As a result, we believe this ETF has good potential to diversify investors’ portfolio of traditional assets.
Competition
The fund faces immense competition from other funds focused on providing exposure to the same space. Below we discuss a few ETFs that seek to provide exposure to this corner (see all Industrial Metal ETFs here).
iPath Dow Jones-UBS Copper ETN JJC
This fund offers exposure to one of the most widely used industrial metals. It seeks to deliver the returns of copper and tracks the Dow Jones-UBS Copper Subindex Total Return index. The index provides returns available through unleveraged investments in futures contracts on the metal.
It has AUM of $74.9 million and charges a fee of 75 basis points a year. JJC trades in an approximate volume of 54,000 shares. It has lost 3.1% year to date but gained 17.1% in a year.
Global X Copper Miners ETF COPX
This ETF seeks to provide exposure to copper mining companies and can be used as a means to attain portfolio diversification through equity exposure to the metal. It tracks the Solactive Global Copper Miners Index.
It has AUM of $93.6 million and charges a fee of 65 basis points a year. COPX trades in an approximate volume of 64,000 shares. It has returned 4.9% year to date and 19.2% in a year.
United States Copper Index Fund CPER
This fund aims to track the performance of copper by tracking the return of Summer Haven Copper Total Return index.
It has AUM of $14.3 million and charges a fee of 80 basis points a year. CPER trades in an approximate volume of 6,000 shares. It has returned 3.0% year to date and 16.0% in a year.
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IPATH-BB COPR (JJC): ETF Research Reports
GLBL-X COPPER (COPX): ETF Research Reports
IPATHBB-COPR SI (JJCB): ETF Research Reports
US-COPPER IF (CPER): ETF Research Reports
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Zacks Investment Research