The iPath Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) is one of this year’s best-performing commodities exchange traded products and that theme has recently been renewed. JJC surged to new highs Monday, extending its one-month gain to almost 8% and its year-to-date gain to over 25%.
Some market observers are encouraged about copper’s bullish technical outlook, which could indicate more upside is on the way for the red metal and products like JJC.
“Doc Copper has created a series of lower highs inside of falling channel since the highs back in 2011,” according to ETF Daily News. “The rally by Copper since 2016, now has it testing the top of its 6-year falling channel. If Doc Copper breaks out, it would send a positive message for Copper and could well attract new buyers on the breakout.”
JJC is an exchange traded note (ETN), not an exchange traded fund (ETF). Similar to index-based exchange traded funds, ETNs also track some sort of index as part of their investment strategy. However, an exchange traded note, like the name implies, is a type of debt note that trades on an exchange. Additionally, the underwriting bank that issues ETN shares may choose to stop share creations.
Another avenue investors can explore to benefit from copper upside is the iShares MSCI Chile Capped ETF (NYSEArca: ECH).
Although Chile is viewed by some market observers as the most advanced and open South American economy and it is undeniably home to Latin America’s highest sovereign credit rating (AA-), there is also no denying the country’s dependence on copper exports as a driver of government revenue. Chile is the world’s largest copper-producing country.
Related: The Red-Hot Red Metal With More Upside
Copper prices are benefiting as investors anticipate greater demand out of China and increased infrastructure projects under President Donald Trump. Some professional traders are reacting by increasing bullish bets on the red metal.
A near-term issue for copper is the ability of the Trump Administration to get its ambitious infrastructure efforts off the ground, something many market observers believe will not happen until next year. Additionally, if that effort does not approach the $1 trillion in expenditures promised by the president on the campaign trail, markets could be disappointed.
For more information on Copper ETFs, visit our Copper category.