We have talked about the Precious Metals markets as well as the Miners quite a bit recently, and today an important Industrial Metal, Copper, is in focus.
Copper is in the headlines not only because it has been weakening for the past several trading sessions, with benchmark ETN JJC (iPath Bloomberg Copper Subindex Total Return ETN, Expense Ratio 0.75%) trading at its lowest levels since June of this year, but also on news that has been circulating regarding the finding of a fraudulent trade-financing scheme in China involving the metal.
JJC has previously had a $36 handle as it does today, not only in mid-June of this year but also briefly in late April, but it has always found a way to eventually rebound to some degree in 2014. JJC remains a rather small fund with about $66 million in assets under management but nonetheless is an important barometer for us at least in the context of infrastructure and industrial production strength and stability, and particularly how it relates to Emerging economies such as China remains very important.
CPER (United States Copper Index, Expense Ratio 0.65%) unlike JJC is structured as an ETF, but it remains small and seems undiscovered by most managers with only $3.1 million in assets under management even though it debuted back in late 2011.
CPER was set up with a goal of mitigating the effects of contango in the Copper futures market, which sounds like some of the other offerings through ALPS in the commodity space that have been developed in recent years.
The fund actually traded good volume earlier this month, with >100,000 shares trading in one given session but typically only trades a few thousand shares per day on average. CUPM (iPath Pure Beta Copper, Expense Ratio 0.75%) is even smaller and lesser known than CPER, with about $1.5 million in AUM which appears to be original seed capital in the product (debuted in early 2011).