Norilsk Nickel has launched the world’s only physically-backed copper and nickel exchange-traded commodities (ETCs) via its Global Palladium Fund.
The GPF Physical Copper ETC (TCOP) and GPF Physical Nickel ETC (TNIK) are listed on the London Stock Exchange with total expense ratios (TERs) of 0.85% and 0.75%, respectively.
Tracking the spot price of their underlying metals, the ETCs are the first to offer physical replications of a new metal since ZKB launched its platinum and palladium ETFs in 2007.
The advantages this offers over synthetic replication include the removal of swap fees, counterparty risk and potential tracking error.
The metals backing the new ETCs are stored in warehouses in Rotterdam, with security enhanced by using IBM’s Hyperledger Blockchain, which creates a block-backed custody chain for the underlying.
Norilsk added the metals tracked by its GPF ETCs are sourced from producers which have confirmed their compliance with the United Nations Sustainable Development Goals (SDGs) of the 2030 Agenda.
The firm also noted the role of both copper and nickel in the clean energy transition, with some commodities pundits dubbing the greening of the world energy mix the new industrial metals super cycle.
Due to their use in electric vehicles and battery components, copper and nickel saw their prices rise by 25.8% and 22.2%, respectively, in 2020.
Commenting on the launches, Alexander Stoyanov, CEO of GPF, said: “The ETCs benefit from our low pricing, enhanced transparency and security and sustainable supply source.”
Timothy Harvey, CEO and founder of NTree, which promotes and markets the securities, said: “The 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 new listings follow the premier of GPF’s first four physically-backed ETCs in January:
- GPF Physical Gold ETC (TGLD)
- GPF Physical Silver ETC (TSLV)
- GPF Physical Platinum ETC (TPLT)
- GPF Physical Palladium ETC (TPAL)