What Lies Ahead For Copper ETFs? [Freeport-McMoRan Copper & Gold Inc., First Trust ISE Global Copper Index Fund]

Global X Copper Miners ETF (NYSEARCA:COPX)

This ETF represents an equity option for copper investors, tracking the Solactive Global Copper Miners Index. This benchmark holds 25 stocks in its basket, while it charges investors 65 basis points a year in fees for the exposure.

The ETF has a definite skew toward smaller securities as large caps account for just one-third of the total.

First Trust ISE Global Copper Index Fund (NASDAQ:CU)

This copper mining ETF follows the ISE Global Copper Index for exposure, tracking 25 companies across the globe. The fund uses an equal weight methodology, giving roughly the same weight to each security in the portfolio, while it charges investors 70 basis points a year in fees for the exposure (see all the materials ETFs here).

Large caps account for roughly two-fifths of assets in this fund, followed by about one-third in mid cap stocks.

What Lies Ahead?

Though a China stimulus is a positive for the metal, the road ahead is expected to remain bumpy. Analysts normally have a mixed view on the metal’s future. While there are some solid drivers like increased construction activities in the U.S., some emerging markets are falling short on the growth front.

Amid such a backdrop, China’s fiscal stimulus will likely prove a boon to this industrial metal, even if Chile exports and an expected short-term disruption in the shipping industry fail to sustain optimism around the red metal in the near term.

This article is brought to you courtesy of Eric Dutram.

Pages: 1 2

Leave a Reply

Your email address will not be published. Required fields are marked *