It might come as a surprise for many ASX investors to learn that there is an exchange-traded fund (ETF) on the Australian stock market that has more than doubled in value over the past 12 months.
It's obviously not an ASX index fund. The Vanguard Australian Shares Index ETF (ASX: VAS), has fared decently, of course. But its respectable 10.67% return over the 12 months to 31 December doesn't quite cut the mustard in this instance.
No, the ASX ETF that has delivered that breathtaking 119% return is none other than the Global X Copper Miners ETF (ASX: WIRE).
Yes, this time last year, WIRE units were asking just $12.46 each. As of Friday's close, those same units will set an investor back $26.29, up more than 111% in 12 months. Add in the dividend distributions that this ETF has paid out over this period, and we get to a 12-month performance figure of 118.77%.
As its name suggests, the Global X Copper Miners ETF is a fund that holds a basket of global stocks all involved in the extraction and processing of copper ore.
This is a truly global ETF. At present, 36.8% of WIRE's portfolio is domiciled in Canada. The United States and Australia make up another 10.45% and 10.3% respectively, while Hong Kong, Japan, Poland and Sweden also contribute meaningfully.
Some of this ASX ETF's top holdings include KGHM, Lundin Mining Corp, Boliden AB, and Sumimoto Metal Mining Co. Our own BHP Group Ltd (ASX: BHP) is also a holding.
Is it too late to buy this ASX ETF?
Copper is one of the most important industrial metals in the global economy, forming the backbone of almost every electronic product you can think of. Demand has been increasing in recent years, thanks to the heavy copper needs of future-facing technologies such as electric vehicles, solar panels and data centres.
Whilst it might be tempting to look at the copper price trajectory and conclude that this ASX ETF is a long-term winner, investors would take note that commodity prices are notoriously volatile, and the share prices of their miners even more so. This ETF has been around since 2022, and hasn't really experienced a sharp share market correction or crash. As such, its 37.55% average return per annum since inception should be taken with a grain of salt.
Saying all of that, we can't deny that this ETF has been an unbridled winner. It may be suitable for investors who are convinced that copper's best days are ahead of us. But I would still class this ASX ETF as a high-risk, high-reward play.
The Global X Copper Miners ETF charges a management fee of 0.65% per annum.
