Would-Be Aluminum ETF May Have a Supplier

By tlydon@globaltrend.com (Tom Lydon),

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The world's top aluminum producer announced that it will consider supplying the metal to a physically-backed aluminum exchange traded fund ( ETF ), but it won't sponsor the fund.

Donny Kwok for Reuters reports that Rusal is an aluminum producer and doesn't intend to get into the business of launching financial products.

Investment banks are seeking a company that can supply them with aluminum, which would be used to back an aluminum ETF. Rusal just might fit the bill.

Rusal also said in a corporate presentation earlier this month that it was considering a Hong Kong listing for an aluminum-backed exchange traded fund, for which it may supply metal. [ The Price Impact of An Aluminum ETF. ]

Rusal has the longest position on aluminum and the market in Asia is of interest to metals investors. But the United States or Europe is expected to get first crack at an aluminum ETF. While you wait for the launch, consider aluminum exposure via:

  • iPath DJ-AIG Aluminum ETN (NYSEArca: JJU)
  • iShares Dow Jones U.S. Basic Materials (NYSEArca: IYM): Gives a small amount of exposure to aluminum producers.

Tisha Guerrero contributed to this article.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing ETFs
Referenced Stocks: ETF

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