Amid surging demand for copper, Global X Investments Canada Inc. has unveiled what it’s touting as the world’s first copper ETF that uses a covered call strategy.
Launched Tuesday, the Global X Copper Producer Equity Covered Call ETF (TSX: CPCC) provides investors with exposure to more than 40 global copper mining stocks.
Its top holdings, by weight, include the Global X Copper Miners ETF (NYSE: COPX), Ivanhoe Mines Ltd., First Quantum Minerals Ltd., Teck Resources Ltd. and Southern Copper Corp.
The fund also features an actively managed covered call strategy, which is designed to generate potential monthly income and reduce volatility, said Raghav Mehta, vice-president, ETF strategy with Global X in Toronto.
“A lot of clients, institutional allocators and wealth management advisors might shy away from holding copper producer stocks or the metal itself, copper, because it does not pay a yield or any income cash flow associated with that. So, we wanted to turn [this fund] into a cash-flow generating asset by using a covered call overlay,” he said in an interview.
“And we saw that there’s no one else doing this, so we wanted to … be the first mover.”
Advisors and investors should note, however, that covered call writing can limit the upside potential of an underlying security or fund.
The ETF aims to capitalize on the surging demand for copper driven by the global push for electrification and digitization, Mehta said: “Copper is powering everything from EVs and renewables, to data centres driving the AI boom.”
Mehta also pointed out that the U.S. Department of the Interior, through the U.S. Geological Survey, recently added copper to its list of critical minerals due to industrial demand and supply risk, potentially paving the way for greater domestic investment in the copper market. Analysts and producers are projecting significant copper supply shortfalls heading into 2026 and beyond.
Given this backdrop, as well as investors’ hunt for gains outside of the technology industry, Global X is expecting “a multi-year bull run” for commodities markets, Mehta said.
“After the long outperformance of tech stocks, institutional investors and even portfolio managers are now rotating towards natural resources teams and commodities teams, because they are looking for the next set of bull market ideas where they can get alpha from,” he added.
CPCC has a high risk rating and 0.65% management fee, plus applicable sales tax.
The fund is suitable for investors who are seeking yield, want to gain exposure to the copper market or commodities market at large, and would prefer trading a copper ETF rather than investing in copper futures contracts or directly holding the metal, Mehta said.
Rocklinc enters ETF industry with new global equity fund
A new asset manager has entered the booming Canadian ETF industry.
Burlington, Ont.-based Rocklinc Investment Partners Inc. recently announced the launch of its first ETF, the Rocklinc Principled Equity ETF (TSX: RKLC), making it the 48th provider in the country.
The fund “holds a concentrated portfolio of 15-25 global stocks, using a disciplined, research-driven approach to identify and patiently hold high-quality securities trading below their intrinsic value,” a release said.
It aims to provide long-term total returns, consisting of both income and capital gains.
The ETF’s annual management fee is 0.8%. It has a medium risk rating.
Evolve banks on Big Six with new ETF
Evolve Funds Group Inc. is banking on Canada’s Big Six banks.
On Tuesday, the asset manager launched the Evolve Big Six Canadian Banks UltraYield Index ETF (TSX: SIXY).
The fund is designed to offer investors “modestly levered” exposure to the six big banks in the country, a release said. It also uses a covered call strategy.
Specifically, SIXY will use 33% leverage “to replicate, to the extent reasonably possible before fees and expenses, up to a 1.33 times multiple of the performance of the Solactive Equal Weight Canada Banks Index, or a successor index,” the release noted. It will also use covered call option writing in an effort to enhance yield and manage risk.
“By pairing our proven covered call strategy with modest leverage, SIXY is built to maximize yield in a single-ticket investment solution,” said Raj Lala, president and CEO at Evolve, in the release.
The fund is expected to pay cash distributions twice a month. It has a 0.6% management fee and high risk rating.
SLGI lowers fund fees, changes fund names
SLGI Asset Management Inc. (Sun Life Global Investments) has announced several changes to its Sun Life Tactical ETF Portfolios.
It’s changing the name of the fund lineup from Sun Life Tactical ETF Portfolios to Sun Life ETF+ Portfolios, the names of the funds in the lineup and certain investment strategies. It’s also reducing management fees across the fund lineup.
The changes are slated to take effect on Monday. A full breakdown is available here.
LongPoint sets sights on new fund
Toronto-headquartered LongPoint Asset Management Inc. and Vancouver-based Moat Financial Ltd. have filed a preliminary prospectus to launch a new North American equity fund.
If approved, the Moat Active Premium Yield ETF would be listed on the TSX under the ticker symbol MOAT.
The proposed fund would seek to deliver “high income and moderate capital growth primarily by writing put options on a portfolio of North American securities and investing, from time to time, directly in these securities,” a release said.
The proposed management fee of the Moat ETF is 0.75%.
If it receives the regulatory green light, the Moat ETF would be the fifth fund launched under LongPoint’s ETF partnership platform, in which LongPoint partners with Canadian, U.S. and international asset managers to bring their funds to the Canadian market.
BMO’s latest batch of CDRs is here
Bank of Montreal is growing its lineup of Canadian Depository Receipts (CDRs).
On Friday, the bank announced the launch of five new CDRs, which invest in the common shares of the following companies:
- Apollo Global Management, Inc. (Cboe: ZAPO)
- ConocoPhillips Company (Cboe: ZCOP)
- Northrop Grumman Corp. (Cboe: ZNOC)
- The Home Depot, Inc. (Cboe: ZHD)
- Vistra Corp. (Cboe: ZVST)
The bank now offers a total of 84 CDRs.
Mackenzie announces changes to RDSP series of fund
Mackenzie Investments has announced upcoming changes to the Registered Disability Savings Plan (RDSP) series of the Mackenzie Ivy Canadian Balanced Fund.
The changes are expected to take effect on or around Dec. 12.
For one, Mackenzie said in a release that it will be launching series AVR and PVR of the fund, with management fees of 1.75% and 1.7%, respectively.
Also, on or around Dec. 12, the AR and PWR series of the fund will be closed to new investments. Investors who held these securities as of that date and continue to hold them will, however, be able to make additional purchases, the release noted.
Mackenzie will also increase some of the maximum trailing commissions of the fund.
The trailing commission for the sales charge purchase option of the fund for both the AR and PWR series will increase to 1% from 0.5%. As well, the trailing commission for the redemption charge purchase option of the PWR series will increase to 0.5% from 0.25%.
Mackenzie declined to a request for comment on these changes.