A Red Metal ETF That's Green With Opportunities | ETF TrendsETF Trends is now VettaFi. Read More -- When it comes to dominating the 24-hour financial news cycle, gold and silver may get most of the attention. Known as the "red metal,†copper may not be on investors' proverbial radars. It should be, though, given its strong growth trajectory in 2026 and beyond.As an industrial metal, copper is a crucial element with an expansive number of use cases. The metal boasts an unmatched combination of excellent elect ...

Core Insights - The investment community is increasingly focused on the demand for copper, driven by the rise of artificial intelligence and machine learning technologies [1][4][5] Group 1: Copper Demand and Market Dynamics - The price of copper has seen significant growth, with a more than 4% increase at the start of 2026 and a 38% rise over the past year [2] - Global electricity demand is projected to increase by 30% by 2035, primarily due to the expansion of data centers, which will double their share of total power use from 1.5% to 3.5% [3] - The copper industry is expected to face a structural deficit, with S&P Global warning of a potential shortfall of over 10 million metric tons by 2040, leaving nearly a quarter of projected demand unmet [6] Group 2: Investment Vehicles and Opportunities - The Sprott Copper Miners ETF (COPP), launched in March 2024, provides a pure-play investment vehicle for copper, aligning with demand themes such as electrification and AI [9] - The COPP ETF offers direct exposure to physical copper, which helps reduce tracking errors relative to copper prices and mitigates risks associated with individual miners [10] - The COPP ETF has performed well, gaining over 6% since its inception, with strong price action above key moving averages and elevated trading volumes in the fourth quarter [12]

Core Insights - Copper has experienced a significant rally since October 2025, driven by supply disruptions at key mines, leading to record high prices for the metal [1][4]. Group 1: Copper Market Performance - The Sprott Copper Miners ETF (COPP) has benefited from the copper rally, providing exposure to both copper miners and physical copper, resulting in a year-to-date NAV increase of 26.05% as of December 31, 2025 [2][3]. Group 2: Supply and Demand Dynamics - Supply constraints for copper are expected to persist, with recent strikes at Capstone Copper's Mantoverde mine in Chile contributing to ongoing supply concerns [4]. - Macroeconomic factors, including U.S. tariffs and political actions in Venezuela, may exacerbate supply issues as 2026 progresses [5]. - Demand for copper is rising due to its critical role in various electrical applications across energy, defense, and technology sectors, suggesting a compelling supply-demand picture for 2026 [6].

Core Insights - Despite gold's significant rally in 2025, the Sprott Silver Miners & Physical Silver ETF (SLVR) led with approximately $450 million in inflows, indicating strong investor interest in silver [1] - Silver experienced a remarkable gain of over 140% in 2025, benefiting from its dual role as both a precious and industrial metal, which positions it as a value-focused safe haven asset amid market uncertainty [2] - The Sprott Critical Materials ETF (SETM) followed with nearly $170 million in inflows, focusing on companies in the critical minerals sector, which is poised for further growth [3] - The Sprott Active Gold & Silver Miners ETF (GBUG) secured over $95 million in inflows, providing investors with diversified exposure to both gold and silver mining sectors [4] - The Sprott Copper Miners ETF (COPP) ranked fourth in inflows, driven by increased electricity demand and potential growth from AI-related capital expenditures [5] - The Sprott Junior Copper Miners ETF (COPJ) is noteworthy for its focus on mid, small, and microcap companies in the copper mining sector, which may benefit from reduced debt servicing costs due to anticipated rate cuts [6]

Core Insights - The Federal Reserve's recent interest rate cuts have led to increased interest in copper as a potential investment opportunity, with prices reaching a record high of $11,906 per ton in London [1][2]. Factors Influencing Copper Prices - Interest rate cuts have prompted investors to shift from bonds to commodities, including copper, due to their value-preserving characteristics [2]. - Additional factors affecting copper prices include mine disruptions, potential tariffs impacting international trade, and the metal's critical role in the renewable energy sector, driven by rising energy demand [3]. Investment Opportunities - The current environment presents favorable conditions for copper miners, suggesting that investors may still capitalize on this opportunity [4]. - The Sprott Copper Miners ETF (COPP) offers exposure to both copper miners and physical copper, allowing investors to benefit from the momentum in the copper market [5]. - The Sprott Junior Copper Miners ETF (COPJ) focuses on smaller copper mining companies, which may experience significant growth due to the current momentum in the industry [6].

Core Viewpoint - UBS anticipates a significant increase in copper prices due to ongoing supply disruptions and strong long-term demand driven by electrification and clean energy investments, revising its price forecast for March 2026 to $11,500 and setting a new year-end target of $13,000 per ton [1] Supply and Demand Dynamics - UBS has sharply revised its deficit forecasts, now expecting a 230,000-ton shortfall in 2025, up from 53,000 tons, and a 407,000-ton deficit in 2026, previously expected to be 87,000 tons [2] - Structural supply constraints are expected to persist in 2026 due to disruptions in major producing countries, slower recovery in Chile, and ongoing protests in Peru [3] Market Influences - The U.S. Dollar Index (DXY) has decreased by 0.52% over the past five days and 8.19% year to date, making dollar-priced copper more attractive to global buyers, which supports higher copper prices [4] - Market expectations of a Fed rate cut in December, with an 85.1% likelihood of lowering rates to 3.50-3.75%, are seen as a tailwind for copper prices, easing financial pressures on manufacturers and construction firms [5] Demand Growth Factors - Global copper demand is expected to rise by 2.8% in both 2025 and 2026, driven by sectors such as electric vehicles, renewable energy expansion, power-grid investments, and increasing data-center activity [6] Investment Opportunities - UBS recommends maintaining long copper positions, noting that any near-term price softness is likely to be short-lived. Several ETFs are highlighted for exposure to copper, including: - Global X Copper Miners ETF (COPX) with a year-to-date gain of 56.27% [7] - United States Copper Index Fund (CPER) with a year-to-date gain of 18.60% [8] - iShares Copper and Metals Mining ETF (ICOP) with a year-to-date gain of 48.63% [8] - Sprott Copper Miners ETF (COPP) with a year-to-date gain of 37.31% [8] - Themes Copper Miners ETF (COPA) with a year-to-date gain of 64.26% [9]

Core Insights - Copper prices have reached an all-time high of $11,200 per ton on the London Metal Exchange, indicating increased market interest in copper [1] Supply and Demand Dynamics - The surge in copper prices is attributed to weakening supply and rising demand [2] - The shutdown of the Grasberg mine in Indonesia is expected to remove approximately 591,000 metric tons of copper production from the market by December 2026, contributing to a supply deficit [2] - Demand for copper is increasing due to concerns over U.S. government shutdowns and tariffs, as well as its critical role in manufacturing and energy security [2] Government Interest and Policy Actions - The U.S. government is showing increased interest in copper mining, highlighted by the signing of an executive order for the construction of the Amber Access Road in Alaska and acquiring a direct equity stake in Trilogy Metals [3] - U.S. policy actions are shaping the copper sector by recognizing its essential role in energy, defense, and technology amidst global competition for critical minerals [3] Investment Opportunities - The Sprott Copper Miners ETF (COPP) offers exposure to both copper miners and physical copper, benefiting from the current market conditions [4] - As of September 30, 2025, COPP's net asset value (NAV) has increased by 22.60% over the last three months, reflecting the favorable conditions driving copper prices [4]

Core Insights - Copper prices and mining equities showed significant strength in August, driven by renewed investor confidence and policy support [2][5] - The exclusion of copper from Section 232 tariffs and its inclusion in the U.S. Geological Survey's critical minerals list contributed to price stability [3] - Both physical copper and mining equities have outperformed broader commodities and U.S. equities in the long term [5] Price Performance - Physical copper prices rose alongside copper mining equities, creating investment opportunities through ETFs [1][4] - August was highlighted as a standout month for critical materials, with copper leading in market performance [5] Mining Sector Analysis - Copper miners reported positive earnings results in August, with improved margins reflecting the benefits of higher copper prices [5] - The mining sector's strength is attributed to various industry factors in addition to rising copper prices [4] Investment Opportunities - Investors can gain exposure to copper through the Sprott Copper Miners ETF (COPP), which tracks both physical copper and mining equities [6] - The Sprott Junior Copper Miners ETF (COPJ) offers exposure to small and mid-cap companies in the copper mining sector, presenting growth opportunities [7]

Core Viewpoint - The Sprott Copper Miners ETF (COPP) will include a 4.75% allocation to physical copper, making it the only ETF providing investment exposure to physical copper alongside copper mining equities [1][2][3] Group 1: ETF Modification - Effective June 23, 2025, the Nasdaq Sprott Copper Miners Index (NSCOPP) will be modified to include a 4.75% allocation to physical copper through the Sprott Physical Copper Trust [2] - This modification aims to enhance investment opportunities in the copper sector, which is critical for meeting global energy demands [3] Group 2: Market Positioning - COPP will be the only ETF that offers pure-play exposure to large-, mid-, and small-cap copper miners, alongside physical copper [1][3] - The addition of physical copper is expected to provide unprecedented access to this essential metal, which is increasingly important in the context of rising energy needs [3] Group 3: Sprott's ETF Family - COPP is part of Sprott's expanding range of critical materials and precious metals ETFs, which also includes ETFs focused on uranium, lithium, and nickel [4] - The Sprott ETFs aim to track the performance of various indices related to critical materials, providing diverse investment options in the natural resources sector [4]