JPMorgan Files For Physical Copper ETF

By
Steve Dew and Olivier Ludwig
October 25, 2010
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J.P. Morgan plans to serve up the world’s first physical copper ETF in a sign of just how hot the materials sector has become.

J.P. Morgan filed with the Securities and Exchange Commission for permission to launch a new physical copper-based fund, the first of its kind in the ETF industry.

The investment objective of the J.P. Morgan Physical Copper Shares ETF “is for the shares to reflect the performance of the price of Physical Copper Grade A,” less expenses, according to the J.P. Morgan’s filing. Physical copper is typically traded in the U.S. on the Comex division of the New York Mercantile Exchange.

JPMorgan’s proposed fund promises to give investors exposure to the spot price of copper, a material that is in increasing demand as emerging market countries, such as China, develop infrastructure. Use of the metal, used in electricity transmission, telecommunications and pipes, is looked at as a bellwether for the global economy.

The ETF would be like State Street’s SPDR Gold Trust (NYSEArca GLD), a physical gold fund that that offers investors ownership of actual bars of gold that are stored in a vault in London.

J.P. Morgan said in the filing the trust’s physical copper will be held by the warehouse-keeper initially in its storage premises in Germany, the Netherlands, Italy, Malaysia, Singapore, Spain, South Korea, the United Kingdom and the United States.

Copper-focused exchange-traded products on the market now, for the most part, track indexes of mining stocks, though an iPath tracks copper futures.

Among the miner’s funds are New York-based Global X’s Copper Miners ETF (NYSEArca: COPX) and First Trust’s ISE Global Copper Index Fund (NasdaqGM: CU) began trading in March. The iPath Dow Jones-UBS Copper Subindex Total Return ETN, a debt instrument, tracks Comex futures.

J.P. Morgan didn’t specify a ticker symbol or expense ratio in its filing, which was dated Oct. 21.

ETF DAILY DATA

The consumer discretionary fund 'XLY' garnered a $1 billion-plus blast of creation on Tuesday, March 3. Still, a falling market offset net inflows and pulled total U.S.-listed ETF assets down to $2.092 trillion.

'VCR,' the consumer discretionary fund, paced Vanguard's issuer-leading inflows on Tuesday, March 3, as total U.S.-listed ETF assets ended the day at $2.092 trillion.

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