ETF Chart of the Day: Calling Copper

There is no doubt that close followers of the Chinese economy and financial markets also follow spot Copper prices, and there has been
demonstrated correlation over time in the price of Copper and the Chinese equity markets for example.

JJC (iPath DJ-UBS Copper Total Return Sub-Index ETN, Expense Ratio 0.75%) stands out as the most well-known ETP that grants exposure to copper futures prices, but the fund itself still only has about $97 million in assets under management despite being around since 2007.

Two other products are now in the Copper futures space as well, but both are significantly smaller in asset size than JJC, and they are CPER (U.S. Copper Index Fund, Expense Ratio 0.65%) and CUPM (iPath Pure Beta Copper ETN, Expense Ratio 0.75%) which have different methodologies and makeups than JJC.

It is also important to point out that CPER is an ETF and not an ETN like the other two choices in the space, for those that are sensitive to exposure to one of the other types of products (for example, some advisors and/or institutions may be prohibited from investing in ETNs for one reason or another, as this is something that we see from time to time in the space).

The last few trading sessions have been interesting because Copper prices continue to churn higher despite Chinese equities being pummeled recently. For example, FXI (iShares China Large Cap, Expense Ratio 0.72%) is off more than 3% in the trailing five day period but this hasn’t stood in the way of a continued rally in Copper prices as measured by JJC.

Copper’s recent strength may also be related to a late year rally across an assorted swath of Commodities that we have also noticed in the past week or that some may have slept on. Crude Oil, Natural Gas, Cotton, Cocoa, and Nickel, to name a few have seen strength in recent sessions that more than catches the eye.

iPath Dow Jones-UBS Copper Total Return Sub-Index ETN