Going Platinum With Platinum ETFs
For those interested in adding platinum exposure to their portfolios, platinum exchange-traded funds (ETFs) can easily and quickly accomplish those goals. This precious metal may not have the name recognition of gold or silver, but it's a crucial aspect of many common items, as well as an ingredient in certain chemical processes.
Here are a few of the basics about platinum investing, along with some examples of platinum ETFs to get you started on your research. Remember, just like any investment, platinum ETFs should be considered in the larger context of your investment goals and risk tolerance.
What Is Platinum?
Platinum may be most commonly noticed as an aspect of jewelry, especially rings. However, platinum has many other applications. It's a critical component of manufacturing and healthcare equipment, and it's increasingly used in the fuel cell batteries of electric vehicles.
Platinum is mined and produced in various parts of the world, but the majority comes from South Africa.
How Can I Invest in Platinum?
While this piece deals primarily with platinum ETFs, there are other ways to invest in platinum. You can play the platinum futures market, for example, or you can invest in platinum mining companies. There are also platinum or precious metals indexes to guide your investment choices. If you have the means to store it, you can also simply buy platinum, as you might with gold or silver.
For most investors, especially those who are just beginning to be curious about platinum, the simplest way to gain exposure is through a platinum ETF.
What Is a Platinum ETF?
Like any ETF, a platinum ETF a product that provides broad exposure to the industry in a single purchase. In the case of platinum ETFs, the underlying holdings of the fund could include platinum miners and other companies that deal with platinum. Other funds have platinum physically stored away.
Platinum ETFs enjoy all the benefits of ETFs, including diversified holdings and some tax benefits compared to mutual funds. Like ETFs covering any other sector, platinum ETFs can also be leveraged or inverse ETFs. These advanced trading tools utilize futures, options, and other derivatives to obtain the goal, which could be to short or outperform the market. There are also platinum exchange-traded notes (ETNs), which are similar products as ETFs, but with key differences to be aware of.
List of Platinum ETFs
Here is a list of platinum ETFs and ETNs for your research. Keep in mind that, while this list is current as of April 7, 2020, it isn't all that unusual for ETFs and ETNs to change their holdings, goals, tickers, and other characteristics. This list is meant as a guide to kickstart your research, so you should dig further to ensure that these products still have characteristics that will help you meet your investment goals.
- PPLT - Aberdeen Platinum Physical Shares ETF
- PLTM - GraniteShares Platinum Trust ETF
- PGM - iPath Series B Bloomberg Platinum Subindex Total Return ETN
- SPPP - Sprott Physical Platinum and Palladium Trust
Similar Precious Metals ETFs
While your options for platinum ETFs are relatively limited, you can expand your options by expanding your investment focus. Precious metals ETFs may include platinum exposure, as well as other metals that are mined around the world.
Here are some products that are similar to platinum ETFs:
- DBP - Invesco DB Precious Metals Fund
- GLTR - Aberdeen Standard Physical Precious Metals Basket Shares ETF
- JJP - iPath Series B Bloomberg Precious Metals Subindex Total Return ETN
- PICK - iShares MSCI Global Metals & Mining Producers ETF
- SLVP - iShares MSCI Global Silver and Metals Miners ETF
The Bottom Line
ETFs are a simple way to add platinum exposure to curious investors. These products are traded any time markets are open—so if you can buy stocks, you can buy these ETFs.
Remember to thoroughly research any product before investing in it. This is true with individual company stock, mutual funds, and certainly with ETFs, as well. In particular, pay close attention to the fund's holdings. This will help you figure out if the ETF holds simple products like stocks or advanced products like options and other derivatives. It's also a good idea to look at historical performance data for the ETF and compare it to the underlying index that the fund tracks. When in doubt, consult a financial professional.
The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.