Q: Question on increasing my copper exposure:
I already own some TECK.B, but concerned about the (approx.) 26X PE ratio. Does this concern you?
I'm considering COPX. Yes, comparing an ETF to a stock is a bit apples / oranges. If I believe that International stocks in general will outperform going forward, is this a good choice. I do realize it does have some North American holdings - including TECK.B itself - but the aggregate PE appears to be better value compared just TECK.B.
Perhaps selling TECK.B and just holding all of COPX is a better choice despite the (I think) 0.65 MER. Your thoughts and comments on all this ?
I already own some TECK.B, but concerned about the (approx.) 26X PE ratio. Does this concern you?
I'm considering COPX. Yes, comparing an ETF to a stock is a bit apples / oranges. If I believe that International stocks in general will outperform going forward, is this a good choice. I do realize it does have some North American holdings - including TECK.B itself - but the aggregate PE appears to be better value compared just TECK.B.
Perhaps selling TECK.B and just holding all of COPX is a better choice despite the (I think) 0.65 MER. Your thoughts and comments on all this ?
5i Research Answer:
TECK.B does have an elevated valuation relative to its historical averages, and while it directionally has been trading in line with the broader copper industry, its fundamentals are decent and we like its business diversity. Over the long-term, TECK.B has outperformed COPX, but it can also undershoot to the downside in a bear market. If an investor is looking to gain exposure to the copper industry, but prefers downside protection, we would prefer COPX. If an investor is looking for a long-term growth position in the copper industry, we would prefer TECK.B.