What is the difference between "paper" and "physical" commodity investments?

"Paper" commodity investments are financial instruments like ETFs that track the price of commodities without owning the physical materials. "Physical" investments refer to the stocks of companies that actually produce, mine, or process these raw materials. This theme combines both approaches to give you exposure to commodity price movements and the businesses that bring those commodities to market.

How do commodity investments help protect against inflation?

Raw materials like metals, energy, and agricultural products tend to increase in price during inflationary periods. When the value of money decreases, hard assets often maintain their relative worth. By investing in both commodity prices and producer companies, you can potentially benefit from rising material costs while also capturing the value added through production and distribution.

What are ETFs and how do they work in this investment theme?

ETFs (Exchange-Traded Funds) are securities that trade like stocks but represent a basket of assets. In this theme, many of the "paper" investments are ETFs that either track commodity prices directly or invest in a group of companies in a specific sector, like copper mining or lithium production. They offer an easy way to gain diversified exposure to commodities without having to buy futures contracts or physical materials.

Why is copper important in the "Paper vs. Physical" theme?

Copper is featured prominently because it's essential for the global energy transition. It conducts electricity efficiently and is used extensively in renewable energy systems, electric vehicles, and power infrastructure. The theme includes multiple copper-focused investments because demand is expected to grow significantly as the world shifts to cleaner energy, potentially benefiting both copper prices and mining companies.

How does the energy transition affect these commodity investments?

The global shift toward renewable energy and electric transport is driving increased demand for specific raw materials. Metals like copper, lithium, and uranium are critical components in green technologies. This theme positions you to potentially benefit from this long-term trend by including both the financial instruments tracking these commodity prices and the companies responsible for producing these increasingly important materials.

9 handpicked stocks

Paper Vs. Physical

Discover a carefully curated collection of investments that balance commodity price speculation with the companies that bring those resources to market. Our analysts have selected these assets to give you exposure to both sides of the materials economy in one strategic package.

Han Tan | Market Analyst

Published on June 17

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

DB Commodity Tracking PowerShares

DBC

Current price

$21.57

Provides broad 'paper' exposure to a diversified basket of commodity futures, representing the speculative side of this theme.

Global X Copper Miners ETF

COPX

Current price

$36.40

Acts as a liquid 'paper' instrument to invest in the collective performance of global copper mining companies.

S&P Metals and Mining SPDR ETF

XME

Current price

$54.78

This 'paper' asset provides diversified exposure across the metals and mining industry through a single, tradable security.

iShares MSCI Global Metals & Mining Producers ETF

PICK

Current price

$34.08

Equinox Gold Corp

EQX

Current price

$11.05

BLACKROCK RESOURCES & COMMOD

BCX

Current price

$10.33

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+53.72%

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About This Group of Stocks

Our Expert Thinking

This strategy gives you the best of both worlds in commodity investing. By including financial instruments that track raw material prices alongside the stocks of companies that produce them, you get balanced exposure to the entire value chain. This approach helps you benefit from both price movements and company growth.

What You Need to Know

These investments serve as potential hedges against inflation and supply-chain disruptions, offering diversified exposure to materials essential for the global economy. The mix includes ETFs for direct commodity tracking and stocks of leading producers, creating a more balanced risk profile than investing in either category alone.

Why These Stocks

Our analysts handpicked these assets to capture the complete commodity lifecycle. With growing demand for resources tied to the energy transition and ongoing geopolitical tensions affecting supply chains, these selections are positioned to potentially benefit from both commodity price movements and the success of their producers.

Group Performance Snapshot

53.72%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 53.72% over the next year.

2 of 9

Stocks Rated Buy by Analysts

2 of 9 assets in this group are rated Buy by professional analysts.

11.7% vs 4%

Group Growth vs Bank interest

This group averaged a 11.7% return last month, beating the typical 4% bank rate.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🌎

Touch Every Part of The Supply Chain

These assets give you access to both the price movements of commodities themselves and the companies that mine, process, and transport them. It's like investing in both oil and the drilling companies at once.

🛡️

Built-In Protection

Raw materials often perform well during inflation and economic uncertainty, making this collection a potential hedge against market volatility. Having both direct commodity exposure and producer equity creates a natural balance.

⚡

Ride The Energy Transition Wave

From copper for electric vehicles to lithium for batteries, these picks are aligned with growing demand for materials critical to green technology and infrastructure. This is where the future is being built.

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