Best Picks for Copper ETF

Copper exchange traded funds are the medium through which one can enter the copper markets (which is seeing a lot of growth). Copper has had a very good trend since the year 2009 where it has seen as much as 30% growth per annum. This upward trend is expected to continue in the coming years given the surging demands from countries like India, China and Brazil. It is anticipated that the demand for this metal will grow by almost 7% in the coming years considering the multiple uses of copper.

There are various copper ETFs around the world. The best amongst the lot for the year 2011 are:

CHOPPER PRICES

• Global X Copper Miners ETF (COPX)
• iPath Dow Jones Copper Index ETN (JJC)
• First Trust ISE Global Copper Index Fund (CU)
• PowerShares DB Base Metals(DBB)
• iShares MSCI Chile Index (ECH).

1) iPath Dow Jones-UBS Copper ETN (JJC)

Copper ETF symbol: JJC
Expense Ratio: 0.75%
Tracking Error: 0.57%

The iPath Dow Jones Copper Index ETN (JJC) is considered to be the "cleanest" copper fund. It targets the Dow Jones-UBS Copper Subindex Total Return index. It at present consists of the single Copper High Grade Futures contract as traded on COMEX. This fund is mainly futures based and as seen with many of the index funds that are based on futures, it carries with it a general roll-over costs risk.

This fund also carries with it a counterparty risk since it is not a real ETF. It is actually an ETN. This is issued by Barclays, which is the managing bank of the fund and is in fact a senior debt

2) PowerShares DB Base Metals ETF (DBB)

Copper ETF symbol: DBB
Expense Ratio: 0.75%
Tracking Error: 0.76%

This fund tracks the DBIQ Optimum Yield Industrial Metals Excess Return index. This particular index includes futures for three industrial metals copper, aluminum and nickel in almost equivalent quantities giving copper a share of about 35%.

3) First Trust ISE Global Copper Index Fund (CU)

Copper ETF symbol: CU
Expense Ratio: 0.70%
Tracking Error: 0.61%

This First Trust ISE Global Copper Index Fund is primarily based on stocks related to copper mining. This fund tracks the ISE Global Copper Index, which includes extractors of other metals apart from copper mining. This index emphasis on the exposure of copper only by measuring the share of all companies by the gains made with the mining of copper only. More than two thirds of these mining companies are placed in Europe and Canada and UK and Canada alone cover up more than 50% of this index.

4) Global X Copper Miners ETF (COPX)

Copper ETF symbol: COPX
Expense Ratio: 0.65%
Tracking Error: 0.48%

This fund tracks the Solactive Global Copper Miners Index. This index consists of stocks of companies involved in copper mining only. The geographical exposure of this fund is strongly in Canada and Europe again at more than 75%. Even this index is largely covered up by Canada and the United Kingdom.

5) iShares MSCI Chile Index (ECH)

The iShares MSCI Chile Investable Market Index Fund is a fund that provides investment results that are generally in tune with the price and the yield performance. These are before deducting the fees and the expenses.

Best Picks for Copper ETF

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CHOPPER PRICES