Leveraged Copper ETFs Explained

Leveraged copper ETFs are designed to provide a multiple of the daily return of copper prices, either by going long or short.

They can be a useful tool for traders looking to amplify their investments, but it's essential to understand how they work and the risks involved.

Leveraged copper ETFs use derivatives, such as futures contracts, to amplify their returns.

This means they can be highly volatile and may not be suitable for all investors.

Investors can now access copper through a leveraged ETF, which provides a more direct and efficient way to invest in copper compared to traditional methods.

The Horizons BetaPro COMEX(R) Copper Bull+ ETF and the HBP COMEX(R) Copper Bear+ ETF are two examples of copper ETFs that offer leveraged exposure to the copper market.

These ETFs are designed to provide daily investment results that correspond to two times the daily performance of the COMEX(R) copper futures contract for a subsequent delivery month.

Investors can choose between a bull and bear ETF, which allows them to profit from a rising or falling copper market.

The copper market is one of the largest base metals markets, but investor purchases and sales can still have a significant impact on the price, making it a high-risk investment.

To start investing in copper ETFs, you'll first need to have an account. This will give you the ability to buy shares in the funds you're interested in.

You can choose from a variety of copper ETFs, each with its own unique characteristics. For example, the WisdomTree Copper 3x Daily Leveraged ETC offers a leveraged exposure to copper prices.

This ETC is designed to provide a total return that's 3 times the daily performance of the Solactive HG Copper Commodity Futures SL Index. If the index rises by 1% over a day, the ETC will rise by 3%, excluding fees.

The Solactive HG Copper Commodity Futures SL Index is the underlying index for the WisdomTree Copper 3x Daily Leveraged ETC. It's a key component in determining the ETC's performance.

Here are some key facts about the WisdomTree Copper 3x Daily Leveraged ETC:

The WisdomTree Copper 3x Daily Leveraged ETC is a fully collateralized Exchange Traded Commodity (ETC), which means it's designed to provide a safe and efficient way to invest in copper prices.

Horizons BetaPro has launched North America's first leveraged Copper ETFs, offering investors a new way to invest in copper.

These ETFs are designed to provide daily investment results that correspond to two times the daily performance of the COMEX(R) copper futures contract for a subsequent delivery month.

The HBP COMEX(R) Copper Bull+ ETF seeks to correspond to two times the daily performance of the COMEX(R) copper futures contract, making it a great option for investors who are bullish on copper.

The HBP COMEX(R) Copper Bear+ ETF, on the other hand, seeks to correspond to two times the inverse of the daily performance of the COMEX(R) copper futures contract, ideal for investors who are bearish on copper.

The Copper ETFs are denominated in Canadian dollars, which means that any U.S. dollar gains or losses will be hedged back to the Canadian dollar.

Horizons BetaPro is a subsidiary of Jovian Capital Corporation and currently has assets under management of approximately $2.4 billion amongst 45 ETFs.

BetaPro's President, Howard Atkinson, points out that these new ETFs are the most direct and efficient way to invest in copper, whether you're bullish or bearish on the direction of the commodity.

The HBP COMEX(R) Copper Bull+ ETF seeks daily investment results that endeavour to correspond to two times (200%) the daily performance of the COMEX(R) copper futures contract for a subsequent delivery month.

The ETF is designed to be the most direct and efficient way to invest in copper, whether you're bullish or bearish on the direction of the commodity.

The HBP COMEX(R) Copper Bear+ ETF seeks daily investment results that endeavour to correspond to two times (200%) the inverse (opposite) of the daily performance of the COMEX(R) copper futures contract for a subsequent delivery month.

The Copper ETFs are denominated in Canadian dollars and any U.S. dollar gains or losses will be hedged back to the Canadian dollar to the best of that Copper ETF's ability.

Each Horizons BetaPro ETF is designed to provide daily investment results before all fees, expenses and costs that endeavour to correspond to either a multiple or inverse multiple (opposite) of the daily performance of a specified underlying index or benchmark.

When investing in a leveraged copper ETF, it's essential to understand the costs involved.

The Ongoing Charge (OCF) is 3.28%. This is the ongoing fee that you'll pay for managing your investment.

Management fees are also applicable, and they amount to 0.99% of your investment.

The indicative spread is 0.37%.

Additional costs may apply in certain cases, so be sure to read the Key Investor Information Document, Factsheet, Prospectus, and any other relevant documentation before investing.

Here's a summary of the costs:

Copper commodity ETFs and mutual funds invest the majority of their assets in physical copper or copper futures contracts. These funds aim to provide exposure to investors who believe the price of copper is heading higher.

Copper commodity ETFs and mutual funds tend to be passively managed. Some copper commodity funds store metal in secure vaults on behalf of investors.

Copper futures usually move in lockstep with the price of physical copper. However, there can be times when it’s more profitable to own futures than physical, and vice versa.

Investors are attracted to copper because it’s a base metal that may do well when economic growth is strong. Copper is used in wiring, in pipes, and is increasingly touted as key to electric vehicles.

The copper market is one of the largest base metals markets. However, investor purchases and sales of copper can still have a large impact on the price.

Investors willing to take on considerable risk may consider copper commodity funds.