Copper ETF – JJC
Copper is something of a stickier wicket when it comes to choosing the best commodity ETF. Unlike a gold ETF or silver ETF, which have physical backings in the metal, the most popular copper ETF options are actually exchange-traded notes.
In short, ETNs actually are debt products that are merely engineered to track a certain index — that means you’re also assuming the credit risk of whatever bank or financial institution backed the note.
Still, short of another major financial crisis, investors should be fine with the iPath Dow Jones-UBS Total Return ETN (JJC), with a couple caveats. Namely, this copper ETF isn’t for long-term holders. JJC tracks front-month copper futures, which is designed to help the commodity ETF better follow spot copper prices. But it’s not a perfect one-for-one — the futures curve also comes into play. A long way of saying, this copper ETF is a complex and far-from-ideal way to track copper.
So why invest in JJC at all? Well, for one, it’s one of the only reasonably liquid funds that tries to track the commodity at all, rather than, say, copper mining stocks. And generally speaking, a bullish play in a copper ETF often is thought of as a good way to bet on a global economic rebound because of the metal’s use in basic infrastructure items such as pipes and cables.
The commodity ETF JJC charges 0.75% in expenses.