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GPF launches physically-backed copper and nickel ETCs


The Global Palladium Fund (GPF), established by MMC Norilsk Nickel, the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper, has launched what it says are the world’s only physically-backed copper and nickel Exchange Traded Commodities (ETCs).  

They are attractively priced with annual total expense ratios (TERs) of 0.85 per cent and 0.75 per cent respectively, making them the most cost-effective way for European-based investors to achieve exposure to the metals through an exchange traded product, as they seek to take advantage of the energy transition megatrend. Copper and nickel are two of the minerals that will feature prominently in the transition to clean energy as highlighted by the International Energy Agency in their recent report, The Role of Critical Minerals in Clean Energy Transitions.

The new ETCs are on London Stock Exchange. The listings follow the launch of GPF’s physically-backed, low-cost gold, silver, platinum and palladium ETCs earlier this year. All six physically-backed metal Exchange Traded Commodities (ETCs) list today on Borsa Italiana – the largest listing of its kind in over a decade. 

GPF is the first ETC issuer to use Blockchain technology to provide investors with enhanced transparency and security in their metal ETCs by recording bar information into distributed ledger technology. 

The new physically-backed copper and nickel ETCs will track the spot price of the metals. The metal backing GPF ETCs is stored in secure warehouses in Rotterdam.

The new ETCs enable investors to take exposure to metals that feature prominently in the transition to the net zero economy. The price of both metals rose strongly in 2020, copper by 25.8 per cent (1) as it benefitted from the growth of Electric Vehicle demand, as well as the roll out of renewable energy systems for power generation. Nickel prices saw growth of 22.2 per cent (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. 

As outlined in the issuing prospectus, the copper and nickel backing the ETCs 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. GPF is the only major ETC issuer to make such a pledge.

To strengthen ETC 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.

Alexander Stoyanov, Chief Executive Officer of GPF, says: “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, says: “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.”

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