GraniteShares launched a new fund on Jan 22, 2018, Graniteshares Platinum Trust (BS:PLTM) , focused on providing exposure to the price of physical platinum.
Precious metal ETFs have been in the spotlight lately and the debate on the use of palladium or platinum in the auto industry continues. Platinum had recently lost its sheen owing to its higher price compared with palladium. However, palladium prices have been rallying since 2017 and have surpassed platinum prices for the first time in almost 17 years, driving speculation that platinum will soon see a surge in demand.
Fund Characteristics
The fund seeks to provide exposure to the price of platinum, by holding physical assets in a vault in London. The fund has amassed $3.0 million in AUM and charges a fee of 50 basis points a year.
How Does it Fit in a Portfolio?
This ETF is a good play for investors looking for some allocation to the precious metal space by investing in platinum. Per a Business Insider article, the global gems and jewelry market is expected to grow 4.73% between 2017 and 2022. Moreover, platinum’s relatively cheap price is increasing its appeal as a substitute for gold in the gems and jewelry markets.
“We believe that platinum is one of the best investment stories never told. Many investors are simply not aware of its investment potential and our mission is to change that,” per a Business Wire article citing a statement by Will Rhind, CEO of GraniteShares. Rhind added, “Platinum is a unique, durable metal that is used in a variety of ways, including in the reduction of vehicle emissions, the making of jewelry and in a range of industrial applications. Through PLTM, GraniteShares is seeking to offer cost-effective access to investing in platinum.”
As a result, we believe this ETF has good potential to diversify investors’ portfolio of traditional assets.
Competition
The fund faces immense competition from other funds focused on providing exposure to the same space. Below we discuss a few ETFs that seek to provide exposure to this corner (see all Precious Metals ETFs here).
ETFS Physical Platinum (NYSE:PPLT) Shares ETF PPLT
This fund is designed to track the spot price of the platinum bullion. It is the only pure play investors can get on the metal, beyond buying shares of platinum miners or buying futures contracts.
The fund has AUM of $597.2 million and charges 60 basis points in fee per year. It has returned 7.3% year to date and 1.3% in a year. As such, PPLT carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
E-TRACS UBS Bloomberg CMCITR Long Platinum ETN (TO:PTM)
This fund is designed to track the price of platinum through a basket of futures contracts. The futures contracts are targeted for a constant maturity of three months.
The fund has AUM of $11.3 million and charges 65 basis points in fee per year. It has returned 6.1% year to date and was flat in a year. As such, PTM carries a Zacks ETF Rank #3 with a High risk outlook.
iPath Dow Jones-UBS Platinum ETN (AX:PGM)
This fund is designed to track the price of platinum through a basket of futures contracts.
The fund has AUM of $5.4 million and charges 75 basis points in fee per year. It has returned 8.0% year to date and 1.9% in a year. As such, PGM carries a Zacks ETF Rank #3 with a High risk outlook.
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IPATH-BB PLAT (PGM): ETF Research Reports
ETFS-PLATINUM (PPLT): ETF Research Reports
E-TRC UBS LG PL (PTM): ETF Research Reports
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Zacks Investment Research