iShares S&P/TSX Gb Base Metals (XBM.TO)

On the theme of AI moving from code to atoms. We need to build out all the data centres and the power structure. That's where the miners come in. This ETF focuses on the base metal miners -- BHP, FCX, AA, and the like.

Not a core holding, more of a satellite in your sleeve of real assets. Expect volatility, so position size matters. Helps diversify, while taking advantage of real growth in AI without the high valuations and tech volatility.

Sector has run, but it's just getting started.

An alternative and proxy to REMX, and trades on the TSX. Gets you more of the base metals such as copper and nickel. Will probably outperform REMX.

Unfortunately, gold and silver are not in this ETF. They aren't base metals. XBM has done alright. Is positive the outlook in this space. Is happy to hold this, and a breakout from this current level is possible.

Base metals ETF?

Base metals are economically sensitive, but there is long-term demand for them. XBM holds larger-cap stocks like First Quantum, Rio Tinto and Freeport-McMoRan. 50% of this ETF are the biggest names.

The recession for copper ended back in October 2022. If we can take out just above $4, that would confirm the series of higher highs and lows, which is the definition of an uptrend. That's what we should expect to see if we're actually starting a new 3-5 year bull market.

He'd be looking to add. When equities lead the commodities higher, that's really bullish. If it takes out its level from the start of the year, that would be very positive, telling us it's going to test highs from 2022.

He really likes the copper space. See his Top Picks.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Gold is the cheapest it has been by historical standards. A good choice for general exposure. Good value and provides global exposure to base metals. The sector is highly cyclical. Unlock Premium - Try 5i Free

Likes base metals, as they're cyclical and sensitive to the economic upturn. Fee is 60 basis points for a diversified mix. Holds BHP, Rio Tinto, First Quantum, and FCX. Volatile, so a 5-10% swing either way is very normal. He owns MXI, in US funds which he prefers, and is only 46 basis points. Great area with the recovery, inflation, and commodity prices moving higher.

(A Top Pick May 15/19, Down 18%) It got hit severely. All base metals are basically four companies. We haven't had a metal cycle in quite a while. The catalyst will be when the US dollar stops being so high and also shortages occur.

(A Top Pick Nov. 17/17, Down 4%) This is set up for a nice little double bottom. This is about risk to reward. If we break $11.90 then there is something more going on.