BlackRock has introduced a new ETF in Europe providing targeted exposure to companies operating in the global copper mining industry.
The iShares Copper Miners UCITS ETF (COPM NA) has been listed on Euronext Amsterdam in US dollars.
The fund comes with an expense ratio of 0.55%.
Copper is one of the world’s oldest industrial metals and an important input in the manufacture of infrastructure such as urban buildings as well as numerous electronic technologies.
Copper’s wide range of applications has earned it the nickname “Dr. Copper” given that its consumption is often used to gauge the health of the global economy – increasing copper usage typically corresponds with periods of worldwide economic expansion.
Demand for copper is also being driven by the climate transition as the metal is an essential component of technologies helping to usher in a low-carbon future. Renewable energy systems, including wind, solar, and hydropower, require copper to generate, transmit, and store electricity, while electric vehicles can use more than double the copper of an internal combustion engine vehicle.
Methodology
The ETF is linked to the STOXX Global Copper Miners Index which selects its constituents from a universe of developed and emerging market stocks with market capitalizations greater than $100 million and average daily trading volumes above $1m.
The methodology targets ‘pure-play’ copper miners by selecting all companies categorized within the ‘Copper Ore Mining’ industry according to the Revere Business Industry Classification System (RBICS). If fewer than 50 stocks have been chosen, the index also selects firms deriving between 25% and 50% of their revenue from copper ore mining (prioritizing those with higher revenue exposure) until the target constituent count is met.
Any firm that has not already been selected but falls within the top 50% of the copper ore mining industry in terms of market share will also be included.
Constituents are weighted by float-adjusted market capitalization while capping the weight of any single stock at 8% and the cumulative weight of all companies with less than 50% revenue exposure to copper ore mining at 25%.
As of the end of May, stocks listed in Canada and the UK each accounted for approximately a quarter of the index’s total weight with the next-largest country exposures being the US (14.1%), Australia (12.3%), and Mexico (9.1%).
Notable positions included First Quantum Minerals (9.5%), Grupo Mexico SAB (9.1%), Freeport-McMoRan (8.2%), BHP Group (8.1%), and Antofogasta (6.7%).