Checking in On Precious Metals ETFs in 2012

Precious metals have been a hot commodity in recent years, as a number of investors have lost their faith in standard equities and fixed income securities. By far, the most popular allocations are to gold and silver, as these two hard assets offer safe haven appeal and have a strong track record for price appreciation. Platinum and palladium round out the precious metals group, both of which are more widely used than the previous two metals. With 2012 being a relatively rocky year for commodities, we outline the performances of the four most popular precious metals ETFs. Note that all four funds feature a physical allocation to their respective metals [for more precious metals news subscribe to our free newsletter].

SPDR Gold Trust (GLD)

The second most popular ETF in the world, GLD reigns supreme when it comes to commodity funds. The fund has more than $67 billion in assets and trades an average of 7.7 million times per day. It is thought of as the primary gold investment (other than physical holdings) for everyone from small investors to billionaires like George Soros. Gold and this ETF have had a relatively tumultuous year, but have managed to eek out gains of around 6%. As we near next week’s Jackson Hole speech, GLD volumes have spiked and investor speculation couldn’t be higher; keep a close eye on this fund.

iShares Silver Trust (SLV)

Silver and SLV are more volatile than their gold counterpart, giving them a level of attraction that GLD can’t reach. More volatility is good for day traders, which is what propels the 8.3 million shares that SLV trades on a given day. Silver has recently been touted from the likes of Jim Rogers as a better investment than gold right now, as many feel its price is far lower than it should be. Thus far in 2012, this ETF has jumped by more than 8%, and is another fund that will remain active through Ben Bernanke’s speech [see also 25 Ways To Invest In Silver].

Physical Platinum Shares (PPLT)

The physical platinum ETF is by far the most popular way to add exposure to this white metal. The fund has just over $750 million in assets but only trades 68,000 times each day. While this is by no means an illiquid volume, it is significantly lower than gold and silver, demonstrating just how popular those two precious metals actually are. PPLT, while it may not be as popular as the rest of the funds on this list, has outperformed the lot, with gains for the year nearing 10%.

Physical Palladium Shares (PALL)

Palladium is the least popular of the four precious metals, but that does not mean it is without its uses. In addition to its use in catalytic converters, palladium is used in a number of electronic products, including computers, cell phones, and LCD televisions. Palladium also has applications in the fields of dentistry, medicine, photography, and groundwater treatment. PALL itself, is home to approximately $500 million in total assets and trades over 56,000 each day. Unfortunately, this fund comes in as the worst precious metal performer, as it falls just into negative territory for the year.

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Disclosure: No positions at time of writing.

This entry was posted in Actionable Ideas, Asset Allocation, Commodity ETFs, Gold, Palladium, Platinum, Precious Metals, Silver and tagged , , , . Bookmark the permalink.

Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

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  • ETFdude

    What is your opinion of GTLR?