We have spoken about a rebound in Precious Metals prices since their late December lows in recent recaps here, and it is not only those metals that are rallying earlier in this new year.
Today we are looking at JJC (iPath Bloomberg Copper Subindex Total Return ETN, Expense Ratio 0.75%), which is the largest ETP in terms of asset size in the small and thinly traded “Copper ETP” space (which is itself part of the much wider Commodity space). JJC has only $61 million in assets under management in spite of debuting back in 2007, and it is still the largest product in this space by a mile when we look at competing ETPs here such as CPER (United States Copper Index Fund, Expense Ratio 0.65%, $5.7 million in AUM) and CUPM (iPath Pure Beta Copper ETN, Expense Ratio 0.75%) which has a paltry $0.5 million in AUM.
With a more than 3.7% lift today, JJC is challenging its recent highs of early December where it briefly eclipsed $31 following a strong run following the election of President Trump last November. The thought is that Copper is one of the Industrial Metals that may prosper in a Trump administration which favors industrial and infrastructure investment and development, and we can look at a similar “Base” or “Industrial Metals” ETP also from iPath known as JJM (iPath Bloomberg Industrial Metals Subindex Total Return ETN, Expense Ratio 0.75%, $7.4 million in AUM), which is also running today and has its highest weighting (over 42.7%) to Copper, and smaller weightings to other Base Metals such as Aluminum, Zinc, and Nickel.
It is important to note that both JJC and JJM are ETNs that invest in the underlying futures contracts on the metals we are speaking about, and not directly investing in the spot metals. JJC has really not seen any swells in trading volume since November even though the predominant trend in price in Copper, with a few pauses along the way, has been up.
On the other hand, the much smaller CPER saw a more than 100,000 share trading day just yesterday, which is very abnormal volume for the product considering its daily average of about 9,900 shares. CPER, unlike the other funds mentioned in this piece, is structured as an ETF which may have appeal to a different set of investors, such as those that may not use ETNs out of personal preference if not their stated investment mandates. With greater than 20% returns in just the trailing three-month period and a new Presidential administration incoming here in the U.S., it would be hard for us to believe that these funds will not be on more radars come the spring or summertime.
The iPath Bloomberg Copper Subindex Total Return Sub-Index ETN (NYSE:JJC) was trading at $30.09 per share on Tuesday afternoon, up $1.06 (+3.65%). Year-to-date, JJC has gained 4.59%, versus a 1.64% rise in the benchmark S&P 500 index during the same period.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.