Copper ETF Investing

A copper exchange trade fund, or ETF, is similar to a stock in that it is traded in the market. However, ETFs are not the same as stocks, as they are actually shares of copper futures contracts that are held in an investment or similar fund.

There are several copper related ETFs. The original is UBS’ iPath Copper Fund. This product is listed as JJC on trades and trade monitoring materials. JJC shares are traded on the New York Commodities Exchange, known as COMEX. Information about this ETF can be found online. For example, the closing price on March twenty-ninth 2010 was forty eight dollars and eleven cents. Information about volume, fees, changes, returns, and more can also be found on the company’s site.

Other companies are available if one is wishing to get involved in copper funds, but they do not deal with just copper. PowerShares DB Base Metals works with copper, but only with one third of its business. The rest of the trade is composed of zinc and aluminum in equal quantities.

After getting involved with and investing in a fund, it is important that one monitor the market and make changes as appropriate. One important task is to watch copper inventories, which can be found as reported by the Shanghai Futures Exchange. Inventories are updated weekly. If inventories increase, it is likely that share prices will decrease, unless demand is increasing proportionally.

A less direct approach is to keep tabs on the economy of China. China uses more copper than any other country in the world. If the Chinese economy does well, it is likely that copper prices will as well, and vice versa if the economy is lacking. Economic expansion such as the kind happening in China increase the use of copper because it is used in housing, transportation, and machinery projects that often go along with such growth. This effect may be noticed in relation to other heavily populated and expanding countries, such as India. In the first quarter of 2009, China was stockpiling copper for use in activities such as plumbing and wiring, resulting in copper ETFs performing better than any other type after gasoline.

To set up to purchase an ETF for copper or another commodity, one must open a brokerage account and have cash to invest. Then one can use the ticker symbol for iPath or other copper-related company to make a trade using their broker.

These funds are predicted to perform well as China and other economies continue to grow. If well planned and monitored, a copper ETF can be a great investment for the future.

One thought on “Copper ETF Investing

  1. I have a question… could you inform me of how & on what exchanges I would trade copper ETF…I am interested in just trading copper without any other quantities such as zinc or aluminum…thank you so much

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