Investing in equities vs underlying commodities

I've been doing some digging on copper miners recently with the whole green transition as my angle. But it had me wondering why not just invest in the underlying metal? Would you get more leverage on your investment by investing in an actual mining company vs a copper ETF?

Comments (5)

Jan 12, 2022 - 4:56pm

Operating leverage is crucial here. Also, if you are bullish on Cu price then have a look at producers sitting on the last quartile of the cost curve (but only if you are bullish). ATYM was a good example a few months ago of that kind of bet. 

  • VP in ER
Jan 12, 2022 - 10:55pm

1) operating leverage; 2) investing in underlying commodities is more difficult than you think - do you invest in physical / producing assets or do you buy futures/etf, if so, which month/year (front month, 6 months out, 1 year out, 2 years out, etc) of the future contract do you buy, do you need to roll over the future contract every month? if you buy commodity ETF, do you know how the fund roll over future contracts? Are you going to make money or lose money if price goes up?

  • PM in HF - Other
Jan 12, 2022 - 11:26pm

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