Physically backed copper and nickel Exchange Traded Commodities launched
The Global Palladium Fund (GPF) is launching what they claim is the world’s only physically backed copper and nickel Exchange Traded Commodities (ETCs).
They are priced with annual total expense ratios (TERs) of 0.85% and 0.75% respectively, and they say are the most cost-effective way for European-based investors to achieve exposure to the metals through an exchange traded product, as they seek to take advantage of the energy transition megatrend.
The new ETCs are on London Stock Exchange and follow the launch of GPF’s physically backed, low-cost gold, silver, platinum and palladium ETCs earlier this year. All six ETCs feature on the Borsa Italiana.
The new physically backed copper and nickel ETCs will track the spot price of the metals. The metal backing GPF ETCs is stored in secure warehouses in Rotterdam, The Netherlands.
The ETCs enable investors to take exposure to metals that feature prominently in the transition to the net zero economy. The price of both metals rose strongly in 2020, copper by 25.8% as it benefitted from the growth of Electric Vehicle demand, as well as the roll out of renewable energy systems for power generation. Nickel prices saw growth of 22.2% driven by its use in battery technology for Electric Vehicles: depending on the model, the nickel content of batteries in battery electric vehicles (BEVs) ranges from 30-110 kgs.
As outlined in the issuing prospectus, the copper and nickel backing the ETCs is sourced from producers and metal suppliers which have confirmed their compliance with the Sustainable Development Goals of the UN 2030 Agenda and other global initiatives in sustainable development and responsible mining. GPF is the only major ETC issuer to make such a pledge.
To strengthen ETC investor security, GPF uses IBM’s Hyperledger Blockchain in the custody chain of the metal. This is in addition to the traditional processes used by the custodian, enhancing the transparency and accountability of the issuer. By recording bar and cathode information on the blockchain, it provides clear ownership and an immutable custody chain for investors using the ETCs.
