7 DEC, 2023
By Johanna Zidani from RankiaPro Europe
In a strategic move to capitalize on the burgeoning demand for copper amid the global energy transition, a new exchange-traded fund (ETF) has been unveiled. The Copper Miners ESG Screened ETF (CPPR) is set to provide investors with a unique and environmentally conscious avenue for exposure to the copper mining sector. The ETF's focus on companies involved in copper mining aligns with the anticipated long-term trends associated with the clean energy transition.
CPPR aims to offer investors a distinctive proposition by providing pure-play and ESG-screened exposure to copper mining equities. The ETF zeroes in on the upstream opportunities presented by copper miners, positioning itself as a strategic investment choice amid the evolving landscape of global energy dynamics. The ETF will be tracking the Nasdaq Sprott Copper Miners ESG Screened Index, ensuring compliance with SFDR Article 8 requirements.
The investment strategy of CPPR involves rigorous ESG reviews by Skarn Associates, controversy reviews conducted by Sustainalytics, and additional screens to ensure alignment with the United Nations Global Compact. By adhering to these stringent criteria, CPPR aims to offer investors a socially responsible investment option within the copper mining space.
Copper, a vital component in electricity grids, electric vehicles (EVs), and renewable energy technologies, is poised to take center stage in the next phase of the commodities market. The most recent commodity supercycle, once dominated by China's industrialization, is now making way for a new cycle driven by the global energy transition. Goldman Sachs highlights that a mere 4% of copper consumption in 2020 was dedicated to green uses, a figure expected to surge to 17% by 2030. With Goldman Sachs estimating copper demand to reach 60 million tonnes by 2030, the demand-supply dynamics for physical copper indicate a potential scarcity.
As the clean energy transition gains momentum, the significance of copper in various sectors is likely to lead to increased demand, outstripping supply.
Investors keen on gaining exposure to this burgeoning sector may find that copper miners historically outperform the spot price of copper. This historical trend underscores the investment appeal of CPPR as a unique entry point into the copper mining equities space.
In conclusion, CPPR's launch represents a timely and strategic response to the evolving landscape of the commodities market, offering investors a focused and ESG-conscious opportunity to capitalize on the anticipated growth in the copper mining sector.
By RankiaPro Europe