Used extensively in the Auto mobile industry, construction Sector and the Power sector, this sturdy metal plays an important role in the manufacturing sectors of the world economies. There is a very strong anticipation of a copper rally in the near future as China has progressed towards urbanization and is investing hugely in the construction sector. The Sino copper demand is the driver of the rally as it claims an approximate 50% share in the total global demand for this shiny commodity. The upward heave of the prices of copper have had a magnetic effect on the flow of investments in the Copper Funds and in the chain of results copper mining equities have also gained huge benefits.
Investing in the ETF would provide an extremely safe and cheap exposure to the best Mining Companies all around the globe. The top holdings of this fund are held in Canada, United Kingdom, Australia and United States. The status of the three major economies (China, India and Brazil) has a large effect on the situation of the commodity investments.
The weakening of currencies against the dollar does have a negative impact on the fund, as the emerging markets are finding it difficult to maintain their growth rates and this might just leave a little sore impact on the investments of the financial vehicles. The demand of the metal might just cease for a while from other economies other than the U.S. But this trend seems to be short-lived.
The fall in the GDP by 7% of the Chinese economy is though a matter of concern. Its financial, power and manufacturing sectors are the cause for leading to a surge in the demand for the red metal. As long as the Chinese economy is not able to stabilize its growth rate, there could be a further push downwards in its demand and prices, putting pressure on the Copper mining companies.
But, there is a bright ray of hope for this red metal, as the Data from the Customs Administration of China shows a remarkable rise in its exports by 5.1 % as compared to last year in July. This latest analysis has brought a spark of excitement in the financial market. There was an anticipation of an increase of 3% but the latest figures submitted have shown a much rosier picture than expected! Annual percentages for the degree of its export to the most important economies, US and Europe have risen by 5.3% and 2.8% respectively. The trade surplus of the Chinese economy is at a surprising $17.8% which signifies a drastic figure in its imports.
All the facts and figures are showing the trend of stabilization for this dragon economy. There has been a jump in the commodity exports and the import of crude oil. The Chinese politicians are now able to breathe a sigh of relief after an exhausting pressure to save the economy from derailing. It seems to be right on track and seems to be heading towards the potential stabilization of its economy.
The dragon economy had accepted a slowdown of a growth of the economy due to the effect of the restructuring policies and orientation programmes, but the top leaders in Beijing strived not to let the annual growth fall below a certain point. The determination has started to show its results.
Global X Copper ETF is attuned to the Solactive Global Copper Miners Index which comprises of equity of 31 stocks. Copper Fund charges an annual fee of 0.65% which is stated as the lowest among the family of its asset class.