Behind the iPath Copper ETN’s Impressive Rally
ETF Database submits: While many commodities have surged higher in recent weeks, a few have stood out as some of the biggest beneficiaries of a suddenly weak dollar and resurgent global economy. Prices of corn and sugar have jumped significantly higher thanks to supply issues, while silver and gold have surged as investors lose confidence in paper currencies and brace for actions that could spur a rise in inflation at some point down the road. However, many important commodities in the industrial metal sector have outpaced these large gains even as as enormous gains in the nickel, zinc, and copper markets haven’t received nearly as much attention as rallies in precious metals and agriculture. In fact, most products in the Metals ETFdb Category have failed to attract significant amounts of assets; seven of the nine funds have less than $75 million under management. Yet despite this lack of interest, many of the funds in this category have surged ahead and have produced solid gains for investors. A great example of this is the exchange-traded note offering exposure to copper. The iPath Dow Jones-UBS Copper ETN (JJC) has skyrocketed by an impressive 30% over the past 13 weeks, making it one of the best performing commodity ETPs over the time period. Going forward, it doesn’t hurt that the copper futures markets are currently flat, suggesting that the fund may be able to avoid the often devastating impact of contango for the foreseeable future. However, this fund has managed to outclass many of its peers in the category on another measure as well; it is one of the more liquid base metal commodity funds on the market with average daily volume of just over 110,000 shares. Due to the fund’s dynamic combination of liquidity and return, we have highlighted three key reasons for JJC’s rise and why the increasingly popular ETN could be headed for new heights in the coming months.Complete Story »
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