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Proprietary Data Insights Financial Pros Precious Metals ETF Searches in the Last Month
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Precious Metals ETFs |
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This Metal’s Recent Popularity Is Surprising |
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The collapse of crypto broker FTX has investors second-guessing the crypto markets entirely. Based on the latest search data from our proprietary Trackstar sentiment indicator, we believe many of them are transitioning back into hard-money assets like precious metals. In fact, that’s precisely why we launched The Alt, InvestingChannel’s newsletter dedicated to alternative investments. Click here to subscribe to The Alt for free.* *By clicking the link you are automatically subscribing to The Alt newsletter. Unsubscribing is easy. Full disclosures here. While gold and silver are always popular hard assets, platinum caught our attention. The rare metal came in third among financial pros’ searches for precious metals ETFs and garnered more searches in the last month than popular mainstream companies like Electronic Arts, Lululemon, and Mastercard. That struck us as rather odd given its typically sleepy nature. So we dug into one of the more popular platinum ETFs, abrdn Physical Platinum Shares ETF (PPLT), to see if it’s worthy of investment. We share our analysis below. Physical Platinum Shares ETF PPLT offers investors a convenient way to gain exposure to the physical platinum market. The ETF doesn’t invest in stocks or futures. Instead, it invests in physical platinum bars stored in vaults in London and Zurich. That eliminates many problems commodity ETFs have, like oil or natural gas ones that rely on futures. The vaults are inspected two times per year, just in case some platinum decided to take a quick walk around the block. Platinum a silvery-white metal that’s resistant to corrosion and used extensively in jewelry. The chemicals industry also uses it as a catalyst. Electronics companies use it for hard disks, optical fibers, and much more. Platinum compounds are even in chemotherapy drugs that treat cancer. Key Facts About PPLT
PPLT is the most liquid platinum product available for investors and accurately reflects platinum price movements. Performance Source: Morningstar Over the last 10 years, PPLT has returned an average of -6.9% annually. Since its inception in 2010, it’s delivered an average of -5.3% a year. Trading PPLT PPLT shares trade thinly. On average, it sees 100K shares of daily volume. You can’t trade options on PPLT, either. That makes it better as a long-term investment than as a trading vehicle. Competition While PPLT is the largest platinum ETF in the market, investors have other options if they want to gain exposure to precious metals. They include abrdn Physical Precious Metals Basket Shares ETF (GLTR), SPDR Gold Shares (GLD), iShares Silver Trust (SLV), and abrdn Physical Palladium Shares ETF (PALL). Portfolio Composition
Each of these ETFs focuses on one precious metal except for GLTR. The GLTR portfolio consists of 52.01% gold bullion, 27.86% silver bullion, 15.96% palladium bullion, and 4.16% platinum bullion. Fees
Fees are competitive across the board, with GLD the lowest at 0.4% and PPLT, GLTR, and PALL the highest at 0.6%. Performance Over the Last Five Years (Cumulative Returns)
The best performer out of the group is PALL at 80.6%. GLD follows at 33.3%, then GLTR at 31%
Our Opinion 5/10 While platinum’s overall performance has been disappointing, some investors think it’s relatively undervalued compared to gold, palladium, and silver and may play catch-up. Given all the inflationary tailwinds, it’s possible to see platinum prices appreciate. But we believe it’s better to have a basket of precious metals instead of focusing on one. That’s why we prefer GLTR over PPLT as part of a diversified portfolio. |
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