United States Copper Fund
United States Copper Fund will hold futures contracts in copper and will use a unique weighting and roll strategy depending on whether or the copper market is in contango or backwardation. Contango occurs when futures contracts nearing expiration are cheaper than longer-dated contracts, while backwardation is the reverse. The fund will be based on the SummerHaven Copper Index.
Copper, one of the most important base metals, is used in pipes, tubing, wires, and other industrial applications. The metal's prices mainly correlate with the construction and industrial activity in any economy. Industry analysts predict that for the first time in four years demand for copper will outpace supply in 2011, pushing the prices up further.
A recent GFMS study said copper prices on the London Metal Exchange (LME) are likely to touch $11,000 per metric tonne (U.S.) by 2013, a 33 per cent upside from current prices, mainly due to the shortages that are estimated.
A major portion of the demand is expected from emerging economies with China's demand rising 6 per cent annually, representing almost two-thirds of global growth from 2010 to 2013. Further, refined copper production is likely to expand by an average 3.4 per cent a year from 2011 to 2013.
Moreover, analysis shows that in 2011, the Middle East will remain an important market for raw materials, supported by oil prices and vast investments in infrastructure. For instance, Saudi Arabia is likely to award construction contracts worth $86 billion in 2011.
https://www.theglobeandmail.com/globe-investor/investment-ideas/three-new-us-etfs-for-commodity-investing/article1821159/