Best Copper ETFs

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When you think of investing in metals, you probably imagine purchasing a gold or silver exchange-traded fund (ETF) or buying gold or silver bars. However, the world of metals is much broader than that. 

Increasingly, investors looking to further diversify their portfolios have started turning to another metal: copper. Here’s Benzinga’s guide to choosing the best copper ETFs.

5 Top Performing Copper ETFs

Are you looking to get into copper? Here are five of the best copper ETFs to consider.

1. United States Copper Index Fund (NYSEARCA: CPER)

This sizable fund has a total of $131.15 million in assets under management. Its expense ratio is somewhat high at 0.85%. It tracks the SummerHaven Copper Index Total Return.

Unlike some other copper ETFs, this one isn’t backed by physical copper or shares of mining companies. Instead, it’s backed by copper futures contracts. Investing in futures can be complicated, so futures ETFs like this one offer a way for less experienced investors to start branching out.

2. Global X Copper Miners ETF (NYSEARCA: COPX)

Investing in precious metals mining companies is a great way to diversify your precious metals holdings. A mining ETF like this one is spread out over several companies, which reduces your risk. ETFs focused on mining companies also are not necessarily connected to copper’s spot price.

COPX is a massive fund with $1.47 billion in assets under management. Its expense ratio is 0.65%. This fund tracks the Solactive Global Copper Miners Index.

3. iShares MSCI Global Metals and Mining Producers ETF (CBOE BZX: PICK)

Relatively few ETFs are dedicated exclusively to copper, so you can also add this metal to your portfolio through an ETF that focuses on multiple metals. PICK is a large, established fund — it currently has $1.49 billion in assets under management. It also has a fairly low expense ratio of 0.39%.

Because PICK includes more metals than just copper, it’s somewhat stabilized. Only about 9.8% of its holdings are copper-related, but it offers a way to invest in copper and other metals at the same time. There aren’t as many copper ETFs as there are silver or gold ETFs, so you may well find that a multi-metal ETF like PICK is the right choice.

4. Sprott Junior Copper Miners ETF (NASDAQ: COPJ)

Investing in ETFs focusing on small mining companies can have surprising advantages. When smaller companies are new and unproven, prices will be low. But as those companies grow, prices may increase. If you buy in relatively early, you might see a great return on investment.

COPJ, a relatively new fund, gives you a great opportunity to invest in smaller miners. It tracks the Nasdaq Sprott Junior Copper Miners Index, a list of smaller copper mining companies. This fund was launched on Feb. 1, 2023, and it has $2.65 million in assets under management. Its expense ratio is 0.75%.

5. iShares Copper & Metals Mining ETF (NASDAQ: ICOP)

ICOP is the newest fund on the list, as it was launched on June 21, 2023. Although there isn’t much performance data, it may offer an opportunity for anyone wanting to invest early as the share price may increase over time. 

This fund includes more than just copper — it also tracks metal ore mining. Since it’s geared more closely toward industrial metals, it can complement investments in precious metals. Its current expense ratio is 0.47%.

What is a Copper ETF?

A copper ETF is a fund that tracks the price of copper or a related index. For instance, the Global X Copper Miners ETF tracks the Solactive Global Copper Miners Index. Most of these funds are backed by copper futures. 

Why Invest in Copper ETFs?

ETFs have the advantage of spreading out risk. Each one is a basket of different commodities. If you were to invest in a single copper mining company, you would be opening yourself up to company-specific risk.

When you invest in a fund like the Global X Copper Miners ETF, you buy small numbers of shares of several companies. If one of them suffers a decline in profits, there will be less effect on the ETF’s total performance. 

When investing in metals, you always have the option to purchase physical metals. Purchasing copper is far less common than purchasing gold or silver, but it’s still possible. When you invest in an ETF, you can avoid the time it takes to find a dealer, make your purchase and locate a place to store your copper.

This process can also be expensive. And when you’re ready to liquidate, selling shares of an ETF is quick and easy. Selling physical copper poses a much greater challenge.

What to Consider Before You Invest in Copper ETFs

You shouldn’t just buy the first copper ETF you see. There are a few factors to consider before making a purchase.

Market Trends

Metal prices are volatile and hard to predict. Reviewing copper price forecasts may help you get a better idea of whether you should buy now. However, different experts may come up with completely opposite forecasts.

It’s also worth looking at copper’s performance in the recent past. If it’s had a good bit of price fluctuation but tends to rise, it may be a good buy. But if the price has been in steady decline, it may not be.

Copper Supply and Demand

Before buying, do some research into copper supply and demand. If a shortage is coming, prices are likely to go up, so this may be a good time to buy.

Fees and Expenses

ETFs come with different expenses. Depending on how you make your purchase, you may be charged a fee.

Expense ratios are important to look at as well. These are usually low, but if you have multiple large investments, they can add up. For example, suppose that you make a $100,000 investment in a copper ETF with a 0.47% expense ratio. This means that you would pay a total of $470 per year.

Risk Tolerance

Regardless of the type of investment you’re making, risk tolerance is an important factor. ETFs may not be as risky as many other kinds of investments, but you should still decide how much you’re willing to invest and possibly lose. And don’t forget to take the volatility of metals markets into account.

Diversify Your Portfolio with Copper ETFs

With all the buzz around investing in gold and to a lesser extent, silver, it's easy to forget that copper ETFs are a viable option as well. If you want to keep your metal holdings as diverse as possible, it’s worth looking into copper ETFs.

Whether you’re revamping your portfolio or building one for the first time, Benzinga has a wealth of resources to help you choose and manage your investments.

Frequently Asked Questions

Best Copper ETFs Methodology

It can be a challenge to select the best ETFs. In making the selections for this piece, Benzinga considered the following:

• Total assets under management
• Expense ratio
• Growth potential
• Diversity of total holdings

You may find that some of these ETFs suit your needs better than others. Do your own research before buying.