Commodities Definition Biography
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So how does JPMorgan justify its view?
It points out that its new copper ETF would not consume metal, it would merely hold it. If and when the metal is needed by real consumers – the likes of Southwire, Luvata and Encore Wire, which are complaining about the ETF – the investors can sell their shares in the ETF and the copper will be available to the market within days, JPMorgan says.
The key question, which JPMorgan does not address, is how readily ETF investors will sell their shares when consumers need the copper.
It is of course impossible to know; but experience from precious metals physical ETFs is instructive. Investment in these products has been fairly “sticky”, with investors tending to buy and hold the shares for several years.
If this holds true for the copper ETF, the impact would be to hold a chunk of metal away from the market for several years. All other things being equal, this should cause prices to rise.
JPMorgan declined to comment.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/a782c1c6-f772-11e1-ba54-00144feabdc0.html#ixzz2Eoc9q3nV
So how does JPMorgan justify its view?
It points out that its new copper ETF would not consume metal, it would merely hold it. If and when the metal is needed by real consumers – the likes of Southwire, Luvata and Encore Wire, which are complaining about the ETF – the investors can sell their shares in the ETF and the copper will be available to the market within days, JPMorgan says.
The key question, which JPMorgan does not address, is how readily ETF investors will sell their shares when consumers need the copper.
It is of course impossible to know; but experience from precious metals physical ETFs is instructive. Investment in these products has been fairly “sticky”, with investors tending to buy and hold the shares for several years.
If this holds true for the copper ETF, the impact would be to hold a chunk of metal away from the market for several years. All other things being equal, this should cause prices to rise.
JPMorgan declined to comment.
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
Commodities Definition
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