The Global Palladium Fund has launched the world’s first physically-backed copper and nickel ETCs.
Alexander Stoyanov, Chief Executive Officer of GPF.
The GPF Physical Copper ETC and GPF Physical Nickel ETC come with total expense ratios of 0.85% and 0.75% respectively and have listed on the London Stock Exchange and Borsa Italiana.
Xetra listings will follow later this month.
The ETCs, which are tradeable in US dollars, sterling and euros, provide a cost-effective way for European investors to achieve exposure to the metals through an exchange-traded product.
Up to now, WisdomTree’s swap-based futures-linked ETCs WisdomTree Copper (COPA LN) and WisdomTree Nickel (NICK LN) have been the primary recipient of European ETF investor allocations to these metals. COPA and NICK come with annual expenses of 0.99%.
The new GPF products will track the spot price of the metals with the physical metal backing them stored in secure warehouses in Rotterdam. They have each been seeded with $5 million.
The underlying physical metal is sourced from producers and metal suppliers which have confirmed their compliance with the Sustainable Development Goals of the UN 2030 Agenda and other global initiatives in sustainable development and responsible mining.
To strengthen investor security, GPF uses IBM’s Hyperledger Blockchain in the custody chain of the metal. This is in addition to the traditional processes used by the custodian, enhancing the transparency and accountability of the issuer. By recording bar and cathode information on the blockchain, it provides clear ownership and an immutable custody chain for investors using the ETCs.
Energy transition
Copper and nickel are two of the minerals that will feature prominently in the transition to clean energy.
The price of both metals rose strongly in 2020, copper by 25.8% as it benefitted from the growth of Electric Vehicle demand, as well as the rollout of renewable energy systems for power generation. Nickel prices saw growth of 22.2% driven by its use in battery technology for Electric Vehicles. Depending on the model, the nickel content of batteries in battery electric vehicles (BEVs) ranges from 30 – 110 kgs, according to Norilsk Nickel, the parent company of GPF.
Commenting on the launch, Alexander Stoyanov, Chief Executive Officer of GPF, said: “GPF is committed to democratising investment in precious and base metals. The new physical copper and nickel ETCs benefit from our low pricing, enhanced transparency and security and sustainable supply source.”
Timothy Harvey, Chief Executive Officer and Founder of NTree, which promotes and markets the securities, added: “The new copper and nickel ETCs are an exciting development for professional investors, enabling them low-cost access to physical metals for the first time. Both metals not only play an important role in the growth of green technologies and energy but can also help to improved risk-adjusted returns in a diversified investment portfolio.”
The tickers and trading currencies for GPF Physical Copper ETC are TCOP LN (USD), TCUS LN (GBP), TCOP IM (EUR), and 0IIE GY (EUR), and for GPF Physical Nickel ETC they are TNIK LN (USD), TNIS LN (GBP), TNIK IM (EUR) and 0IIF GY (EUR).
Flow Traders acts as authorised participant with GHCO as market maker.
The listings follow the launch of GPF’s physically-backed, low-cost gold, silver, platinum and palladium ETCs earlier this year.