Investing With a Copper ETF
It is commonly used in electrical wiring, plumbing, making cooking utensils, heating application and as an essential element of alloys.
Exchange Traded Funds (ETF) have made natural resources as good investment opportunities.
The establishment of ETF has classified the commodities as the fourth asset class which gives investors an overwhelming cash flow.
Owing to its surging demand and usefulness in the industry, copper is now being traded around the world and is considered as a popular investment.
Although the price involved is relatively low compared to other high worth metals like gold and silver, its value varies depending on the industrial need.
The earning opportunities in a copper ETF can be influenced by various factors like housing projects, and supply and demand.
Copper has various applications to building construction starting from wiring to roofing.
High demand for copper when various housing projects are anticipated can push the price to the highest quote.
Conversely, few constructions will cause the price to go down.
Another factor that affects the price of copper is the rising demand from China which is the current concern of copper investors.
The country imposes tightening measures in order to meet their need for raw materials.
According to the International Copper Study Group, China's consumption of copper will soon decline so that the current situation on copper investment is only a temporary one.
If you want to invest in copper, you can use the pure play structured as an ETN (exchange-traded note).
You will not be investing in the physical metal itself but on unsecured debt instrument.
JJC is your best choice for ETN because it has 100,000 shares daily volume and is highly liquid.
It trades High Grade Copper investment future contracts on the New York Commodities Exchange (COMEX).
There are also other ETFs where you can invest in copper.
It includes the PowerShares DB Base Metals Fund (DBB), iShares Chile ETF, iPath Dow Jones-UBS Industrial Metals ETF (JJM); and Elements Rici Metals Total Return ETN (RJZ).
They all have copper allocations though containing industrial metals like aluminum.