Precious metals such as gold, silver, and platinum are valued by many investors as a hedge against inflation or a safe haven in times of economic turmoil. They also are valued for their rarity and their use in a broad range of industrial applications. Precious metals exchange-traded funds (ETFs) are a popular way to invest in these metals, either through physical or futures-based exposure. ETFs can offer a more liquid and easier approach to investing in precious metals than buying futures contracts, purchasing bullion, or buying stock in publicly traded companies involved in the exploration or production of these metals.

The precious metals market has dramatically underperformed the broad U.S. equity market over the past year.
The precious metals ETFs with the best one-year trailing total return are PALL, PPLT, and GLTR.
The top holdings of these ETFs are palladium, platinum, and gold, respectively.

There are 15 precious metals ETFs that trade in the U.S., excluding inverse and leveraged ETFs as well as funds with less than $50 million in assets under management (AUM). These ETFs are invested in physical precious metals rather than the shares of precious metals mining companies.

The benchmark S&P GSCI Precious Metals Index has significantly underperformed the broader market over the past 12 months, providing a total return of -16.6% versus the S&P 500’s total return of 34.0%, as of Aug. 10, 2021. The top precious metals ETF, based on performance over the past year, is the Aberdeen Standard Physical Palladium Shares ETF (PALL). We examine the three best precious metals ETFs below. All numbers are as of Aug. 10, 2021.

Performance over One-Year: 18.2%
Expense Ratio: 0.60%
Annual Dividend Yield: N/A
Three-Month Average Daily Volume: 34,202
Assets Under Management: $458.2 million
Inception Date: Jan. 6, 2010
Issuer: Standard Life Aberdeen

PALL is structured as a grantor trust, offering investors a certain degree of tax protection. The fund aims to track the spot price of palladium and provides investors with a cost-effective and convenient way to gain exposure to this precious metal. Investors should note that the price of palladium can be very cyclical as it tends to be highly correlated with the automobile industry. The physical palladium backing the fund is held at a secured vault of J.P. Morgan Chase Bank in London, U.K.

Performance over One-Year: -0.1%
Expense Ratio: 0.60%
Annual Dividend Yield: N/A
Three-Month Average Daily Volume: 129,588
Assets Under Management: $1.2 billion
Inception Date: Jan. 8, 2010
Issuer: Standard Life Aberdeen

PPLT is also structured as a grantor trust, providing some tax protection for investors. Platinum is a difficult precious metal for investors to access and PPLT is one of the only options for platinum exposure aside from futures contracts, individual platinum coins, and shares of platinum mining companies. Like palladium, platinum is also highly correlated with the automobile industry and thus tends to be very cyclical. PPLT’s platinum bullion is stored in vaults in London, U.K. The metal is held in allocated bars and the bar list is posted daily.

Performance over One-Year: -12.0%
Expense Ratio: 0.60%
Annual Dividend Yield: N/A
Three-Month Average Daily Volume: 70,565
Assets Under Management: $1.1 billion
Inception Date: Oct. 22, 2010
Issuer: Standard Life Aberdeen

GLTR is also a grantor trust, although, unlike the other two funds above, it invests in various precious metals rather than a single one. The ETF aims to track the performance of a basket comprised of gold, silver, platinum, and palladium bullion and provides investors with a cost-effective and convenient way to gain exposure to physically backed precious metals. Gold receives the largest weighting in the fund, followed by silver, palladium, and platinum. Like the other Standard Life Aberdeen ETFs above, the metals are stored in secured vaults in London and
held in allocated bars, with the bar list posted daily.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.


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