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.

15 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

Updated 2 days ago | Published at जून 17