If you're thinking about adding platinum exposure to your portfolio, platinum exchange-traded funds (ETFs) may help you meet your goals. This precious metal may not have the name recognition of gold or silver. But it's a vital aspect of many common items; it's also a factor in certain chemical processes.
Here are a few of the basics about platinum investing. Also, find out some examples of platinum ETFs to get you started on your research. Keep in mind that these ETFs should be looked at in the larger context of your goals and risk tolerance. This is true with any investment you make.
- Platinum has many applications. These include manufacturing, health care, and electronics, making it a valuable resource.
- Platinum exchange-traded funds (ETFs) are a way to gain broad exposure to the industry with just one purchase.
- While your options for platinum ETFs are fairly limited, you can expand your options by expanding your focus to other precious metals.
- When investing in platinum ETFs, it's important to fully research the background of the fund and its holdings to be sure it aligns with your goals.
What Is Platinum?
Platinum may be most often noticed as an aspect of jewelry, especially rings. But platinum has many other uses. It's a critical component of manufacturing and health care equipment. Also, it's often used in the fuel cell batteries of electric vehicles.
Platinum is mined and produced in various parts of the world, but most of it comes from South Africa.
How Can You Invest in Platinum?
This piece puts focus on platinum ETFs. But there are other ways to invest. You can play the platinum futures market, for instance. Or, you can invest in mining companies. There are also platinum or precious metals indexes to guide your choices. If you have the means to store it, you can also simply buy platinum, as you might with gold or silver.
For most people, the simplest way to gain exposure is through a platinum ETF. This is even more true for those who are just beginning to be curious about platinum.
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; it could also include other companies that deal with platinum. And other funds have platinum physically stored away.
Platinum ETFs enjoy all the benefits of ETFs. These include 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 use futures, options, and other derivatives to obtain the goal. This goal could be to short or outperform the market.
There are also platinum exchange-traded notes (ETNs). These are similar products as ETFs, but with some key differences.
List of Platinum ETFs
Here is a list of platinum ETFs and ETNs for your research. Keep in mind that 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. You should dig further to ensure that these products will help you meet your goals. This list is current as of July 1, 2021.
- 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 fairly limited, you can expand your options by expanding your focus. Precious metals ETFs may include platinum exposure; they may also include 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 exposure if you are looking to invest in platinum. These products are traded any time markets are open; if you can buy stocks, you can buy these ETFs.
Always research any product before investing in it. This is true with company stock, mutual funds, and certainly with ETFs, as well. 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 performance data for the ETF; then, compare it to the underlying index that the fund tracks. When in doubt, consult a professional.