Physical Platinum, Palladium ETFs Are Finally Here
Sunday, January 10th, 2010Michael Johnston submits:
After weeks of anticipation, the first ETFs offering U.S. investors exposure to Platinum Group Metals (PGMs) launched on Friday, as London-based ETF Securities (ETFS) introduced the ETFS Physical Platinum Shares (PPLT) and ETFS Physical Palladium Shares (PALL). These funds bring the total number of U.S.-listed ETFs from ETFS to four, joining gold and silver ETFs launched last year.
While physically-backed platinum and palladium ETFs have been available in Europe for some time, bringing these products to market in the U.S. has been a challenge. Platinum and palladium are two of the rarest metals on earth, with total annual supplies far lower than gold and silver. Given the popularity of some precious metals ETFs — there are currently more than a dozen products with aggregate assets of almost $50 billion — some were worried that market prices could be distorted and long-term demand impacted. At least one platinum mining firm initially came out against the concept, worrying that hoarding would drive up prices in the short term and hurt long-term industrial demand.
