Sprott Debuts Physical Platinum-Palladium Fund

As the end of the year draws closer, tensions in Washington D.C. are starting to boil as gridlock may push us over the much-feared “fiscal cliff” and back into recession. Diminishing hopes that policymakers can strike a deal before the deadline has kept a lid on confidence while prices have remained fairly stable, which may be setting up stock markets for a disastrous open in 2013. Amid the mixed landscape, Toronto-based Sprott Asset Management rolled out a physical platinum and palladium fund on the NYSE [for more economic news and analysis subscribe to our free newsletter].

Sprott’s Physical Platinum and Palladium Trust (SPPP) marks another stride forward in the democratization of the commodity asset class. Investors should note, however, that amid the wave of ETF launches, Sprott’s offering is actually a closed-end fund. PlatinumThis means that SPFF can trade at a premium or a discount to its NAV for prolonged periods of time since the number of shares outstanding is static when compared to an ETF, which instead relies on the dynamic creation/redemption mechanism [see 3 Forgotten Ways To Play The Mining Industry].

SPPP comes with a 0.50% annual price tag, which is quite competitive considering that its closest ETF-counterparts both charge a steeper fee. Like other Sprott metals funds, SPPP boasts a redemption feature that allows investors to redeem their shares for physical platinum and palladium, a feature that some find incredibly appealing.

Ways To Play

Investors looking to gain exposure to platinum and palladium, but who wish to steer clear of futures contracts, may opt for two existing exchange-traded funds offered through ETF Securities:

  • Physical Platinum Shares (PPLT): This ETF is designed to track the spot price of platinum bullion and charges 0.60% in annual expense fees.
  • Physical Palladium Shares (PALL): This ETF is designed to track the spot price of palladium bullion and also features a price tag of 0.60%.

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Disclosure: No positions at time of writing.

This entry was posted in Investment Vehicles, Palladium, Platinum 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.

4 Responses to “Sprott Debuts Physical Platinum-Palladium Fund”

  1. [...] Washington D.C |Leave a comment » Our Market Letter will return In the New Year POSTED ON DECEMBER 26, 2012 BY STOYAN [...]

  2. [...] may want to consider exchange-traded funds (ETFs) or exchange-traded notes (ETNs) that hold physical palladium, while palladium mining companies offerexposure to the commodity with the potential upside or [...]

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