What Are Aluminum ETFs?
For investors looking to establish exposure to aluminum, there are exchange-traded products that can minimize the monitoring and rebalance required. One such fund offers exposure to aluminum futures contracts; the iPath Dow-Jones Aluminum ETN (JJA) is linked to an index that consists of aluminum futures. As such, investors should realize that JJA will deliver returns available through a futures-based strategy, which will not necessarily match up with movements in spot prices. It should also be noted that JJA is an ETN, meaning that investors are exposed to the credit risk of the issuing institution.
Investors in international markets may have more options for aluminum exposure through ETPs; ETF Securities offers leveraged and inverse aluminum products in European markets in addition to traditional long exposure funds.
It is also possible to gain exposure to companies engaged in aluminum production through an ETF; the (ALUM) invests in companies that are engaged in the mining and sale of aluminum. While this ETF also will not move in unison with spot prices, it can be a way to gain exposure to the metal while avoiding futures contracts.