Tariff Shock Crushes Copper But This ETF Could Shine
A surprise exemption just flipped the copper trade on its head. Here’s how you can make a contrarian play.
In a surprising turn of events for the commodities market, copper futures saw a nearly 20% drop last Wednesday. This dramatic crash followed a key announcement from the Trump administration: refined copper imports, specifically copper cathodes, would be exempt from the new 50% tariff.
The decision left the new levy to target only semi-finished products, such as copper pipes, rods, and wires.
Why Copper Prices Have Dropped?
This sudden policy change was a brutal shock to traders.
For weeks, market speculation about a broad, all-encompassing tariff had fueled a rally, sending COMEX copper futures to record highs. Traders, anticipating a massive price gap, had rushed to import refined copper, creating a significant surplus of copper cathodes in U.S. warehouses.
The tariff exemption for these cathodes instantly erased the opportunity for arbitrage, leading to a market collapse.
Buying Dip with a Copper ETF
While the new copper tariffs won’t be added to auto import duties, the future remains uncertain. For investors who believe in a future rebound in the copper market, this recent dip could be an excellent chance to gain exposure through a copper-focused ETF.
While there’s no Canada-listed ETF offering direct exposure to physical copper or copper futures, the Global X Copper Producers Index ETF (COPP) provides investors with a targeted way to access North America’s copper mining sector.
Launched in May 2022 and managed by Global X Investments Canada Inc., COPP tracks the Solactive North American Listed Copper Producers Index, focusing on companies actively engaged in copper ore mining and listed on select North American stock exchanges.
Key Fund Details:
- AUM: CAD 21.2 million
- Management Fee: 0.65%
- MER: 0.79% (as of Dec 31, 2024)
- Distribution Yield: 0.18% (trailing 12-month)
- Distribution Frequency: Annual
Performance Snapshot (as of July 31, 2025):
- 1 Month: -5.83%
- 3 Months: +13.36%
- 6 Months: +7.67%
- YTD: +5.15%
- 1 Year: -4.87%
- Since Inception (Annualized): +9.83%
- 2023 Return: +10.31%
- 2024 Return: +17.23%
Top 10 Holdings (as of July 25, 2025):
- First Quantum Minerals Ltd – 10.91%
- Freeport-McMoRan Inc – 10.45%
- Lundin Mining Corp – 10.06%
- Southern Copper Corp – 9.58%
- Teck Resources Ltd Cl B – 8.22%
- Ivanhoe Mines Ltd Cl A – 7.92%
- Capstone Copper Corp – 7.54%
- Buenaventura (ADR) – 7.52%
- Hudbay Minerals Inc – 6.66%
- TMC the metals company Inc – 4.93%
COPP's focus on publicly traded miners gives investors potential benefit from operational leverage to copper prices during bull markets. The fund also includes a currency hedge, aiming to neutralize U.S. dollar exposure by hedging back to the Canadian dollar at all times.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
