An Industrial-Strength Copper ETF

Some investors refer to copper as “Dr. Copper,” because they feel it has an ability to predict fluctuations in economic growth. As such, they say it “has a Ph.D. in economics.”

It gets the moniker because of its prevalence in such a wide array of industries. For example, copper is heavily used in construction, particularly for piping and wiring, as well as in electronics and power generation.

If you want to gain exposure to “Dr. Copper,” a copper ETF is a low-cost way to do so. Below we’ll take a close look at one copper ETF that’s available to investors now. But first, here’s a look at how copper prices have performed in the past few years, as well as some factors affecting the metal’s short- and long-term prospects.

Copper prices fell to a low of $1.30 a pound in late 2008 before rebounding to a high of $4.58 in February 2011. However, copper has suffered due to concerns about the slowing economy in China, which is the world’s leading copper consumer. Investors are also worried about rising supplies as new mines begin to come on stream.

Standard & Poor’s is now forecasting an average copper price of $3.30 a pound for 2013, according to That’s up from current levels, but the rating agency sees prices averaging $3.10 in 2014 and falling to $2.70 by 2015.

This Copper ETF Lets You Invest in a Broad Mix of Copper Stocks

In the long run, however, copper demand should rise as developing nations like China and India continue to urbanize. According to a recent BNAmericas article, Michael Harris, general manager, economics and markets at Rio Tinto (NYSE: RIO) predicts that 2 billion people will move from into cities by 2030.

“We expect demand growth to remain strong and supply will be hard pressed to meet demand,” he said.

If you want to increase your exposure to copper stocks, one way to do so is through a copper ETF like the Global X Copper Miners ETF (NYSE: COPX).

The copper ETF tracks the Solactive Global Copper Miners Index, which is designed to reflect the performance of the global copper mining business. The index consists of shares of companies from around the world that are engaged in some aspect of copper extraction and production, including mining, refining and exploration.

The ETF’s top holdings include Turquoise Hill Resources, Capstone Mining, Freeport McMoRan Copper and Gold, Vedanta Resources, Taseko Mines, Lundin Mining Corp., First Quantum Minerals, Antofagasta plc, Imperial Metals Corp. and Southern Copper Corp.

This Copper ETF Has Holdings in Stable Mining Regions

As of the end of the 2013 first quarter, the copper ETF held the largest portion of its holdings in Canada, followed by the U.K., Australia, Mexico, Peru, Switzerland, Poland, China, the U.S. and Turkey. It has an expense ratio of 0.65%.