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Investing in Copper and Copper Funds

Copper is one of several important metals that will be needed in the transition to a green and sustainable world. The electrification of our society is a strong driving force for its increased demand, which also makes the metal interesting from an investment perspective. This text will go through why Copper can be good to expose yourself to in an investment portfolio, as well as how to go about investing.

Copper (Cu in the periodic table), is the metal that conducts electricity second best (after silver). Because copper is cheaper than silver, the metal is mainly used when larger volumes are required.

Why invest in Copper?

​Demand for copper is expected to increase in the coming years, a major reason for this is the electrification of our society. Because copper is used in cables, electric motors, batteries, etc. Increased demand for these products will affect the price of the metal and is therefore a good reason to invest in copper.

​Investing in the raw materials required to create a green future can be a good strategy for diversifying your portfolio towards raw materials, as well as if you do not know which companies will build the best products from the raw material. By owning the raw material directly, or the companies that extract the raw material, you can get a cleaner exposure to a future price increase in the raw material.

How to invest in copper?

There are several ways to invest in copper: ​

  • Shares: Buying shares in the companies that create extracts the raw material.
  • Copper Funds: Invest in a commodity fund that provides direct exposure to the commodity, or the companies that extract the commodity. There are different types of funds. When you invest in a fund, you pay a fee for an expert (fund manager) to select the underlying assets. There are two types of funds:
    • Daily traded fund: Often actively managed, which means that an expert reviews the holdings and rebalances at regular intervals.
    • Exchange Traded Fund: A basket of securities that follows an index and is traded as a stock.

Benefits of investing in copper funds?

Copper funds typically provide:

  • Diversified exposure to copper through investments in companies active in extracting the metal, so-called miners. The price of these companies' shares tends to covariate with the metal price and, in addition, pays a dividend, which would not have been obtained with direct investment in the metal. If you want to invest in copper directly, you can buy derivatives that follow the metal price.
  • A professional portfolio manager that selects the holdings of the fund and keep tracks of the market.

Investing in funds comes with a management fee, and involve risks. Always read the fund sheet before investing.

Why invest in copper with AuAg Funds?

  • AuAg Fonder offers funds that focus on providing exposure to precious metals such as copper and elements in green technology. What they have in common is that these assets offer protection against monetary inflation and are necessary in the transition to a green economy – trends that are highly topical today.
  • AuAg's funds fit well into a portfolio of traditional assets as they have low correlation with equities in particular.
  • AuAg provide investors with a copper mining investment through the fund AuAg Precious Green.
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