When it comes to precious metals investing, platinum ETFs are often times at the top of many lists.
So, even though we publish a lot about precious metals IRAs on this website, I wanted to write a deep dive on one of few metals that people hold in their IRAs.
I don’t have any specific ‘calls to action’ in this article, just strictly about different platinum ETFs through the entire life cycle of platinum.
I also added some charts that I hope can help you read through, and understand, this a bit better.
Quick Disclaimer:
The content provided in this article is for informational purposes only and should not be considered financial or investment advice. Always consult with a qualified financial advisor before making any decisions regarding Precious Metals, Investing, or IRAs. Additionally, this article contains affiliate links, and I may earn a commission if you make a purchase through these links, at no additional cost to you.
Another question, I have been asked is, “What Gold IRA companies are the best” or “Which IRA companies are the most trusted?”.
If you’d like more information, below is a link to a comparison PDF by Augusta Precious Metals that could be useful. (It’s also free.)
Augusta Gold IRA Company Integrity Checklist
What Are Platinum ETFs?
Platinum ETFs, or Exchange-Traded Funds, offer a way to invest in platinum without the need for physical ownership.
These funds track the price of platinum by holding physical platinum or through financial derivatives.
This means you can gain exposure to the platinum market without dealing with the hassle of storing and securing the actual metal (Investopedia).
Platinum ETFs are traded on stock exchanges, making them accessible and easy to buy or sell.
This provides liquidity, allowing you to enter or exit your investment with relative ease.
By investing in platinum ETFs, you can add a precious metal to your portfolio, potentially benefiting from its price movements.
Benefits of Investing in Platinum ETFs
Investing in platinum ETFs comes with several advantages that make them an attractive option for many investors:
- Simplicity and Convenience: Unlike physical platinum, ETFs are easy to trade and don’t require storage or security measures. This makes them a straightforward way to invest in platinum.
- Portfolio Diversification: Adding platinum ETFs to your investment mix can help diversify your portfolio, reducing risk. Precious metals like platinum often move differently from stocks and bonds, providing a hedge against market volatility.
- Lower Transaction Costs: Trading platinum ETFs generally comes with lower transaction costs compared to buying and selling physical platinum. This can make them a cost-effective way to gain exposure to the metal.
- Liquidity: Platinum ETFs are traded on stock exchanges, providing liquidity. You can buy or sell shares quickly without significant price differences.
- Growth Potential: With the growing demand for precious metals in industries like electric vehicles (EVs) and semiconductors, platinum ETFs offer the potential for long-term growth.
| Benefit | Description |
|---|---|
| Simplicity and Convenience | No need for physical storage or security measures |
| Portfolio Diversification | Helps reduce risk by adding a precious metal |
| Lower Transaction Costs | Typically lower than trading physical platinum |
| Liquidity | Easy to buy and sell on stock exchanges |
| Growth Potential | Demand driven by industries like EVs and semiconductors |
For more information on how to invest in platinum, check out our guide on how to invest in platinum.
For additional insights and strategies, visit our section on platinum investing strategies.
Top Platinum ETFs
When it comes to investing in platinum, Exchange-Traded Funds (ETFs) offer a convenient and efficient way to gain exposure to this precious metal.
Below, you will find details on three of the top platinum ETFs: GraniteShares Platinum Trust (PLTM), abrdn Physical Platinum Shares ETF (PPLT), and iPath Series B Bloomberg Platinum ETN (PGM).
GraniteShares Platinum Trust (PLTM)
The GraniteShares Platinum Trust (PLTM) is designed to track the spot price of platinum.
This ETF is backed by physical platinum held in a secure vault located in London, which is inspected twice per year.
| ETF | Assets ($M) | Expense Ratio (%) |
|---|---|---|
| GraniteShares Platinum Trust (PLTM) | 920 | 0.50 |
For more information on how this ETF fits into broader platinum investment strategies, consider looking into its performance history and market trends.
abrdn Physical Platinum Shares ETF (PPLT)
The abrdn Physical Platinum Shares ETF (PPLT) is structured as a grantor trust and prices platinum based on the London Platinum and Palladium Market’s specifications for good delivery.
The physical platinum for this ETF is held in secure vaults in London and Zurich (Investopedia).
| ETF | Assets ($M) | Expense Ratio (%) |
|---|---|---|
| abrdn Physical Platinum Shares ETF (PPLT) | 920 | 0.60 |
As the largest platinum ETF, PPLT provides a reliable option for those looking to invest in platinum.
For more on platinum investment options, exploring PPLT’s structure and holdings can be beneficial.
iPath Series B Bloomberg Platinum ETN (PGM)
The iPath Series B Bloomberg Platinum Subindex Total Return ETN (PGM) offers a unique approach as it is structured as an Exchange-Traded Note (ETN).
Instead of holding physical platinum, PGM provides exposure to the Bloomberg Platinum Subindex Total Return through futures contracts (Investopedia).
| ETF | Assets ($M) | Expense Ratio (%) |
|---|---|---|
| iPath Series B Bloomberg Platinum ETN (PGM) | Not specified | Varies |
PGM can be an intriguing choice for those interested in the futures market and seeking different platinum investment opportunities.
For an in-depth understanding of the factors that influence platinum prices and how these ETFs perform in various market conditions, consider reading our articles on platinum price prediction and platinum supply and demand.
Factors Influencing Platinum Prices
Market Demand
Market demand is a primary driver of platinum prices.
As the demand for precious metals, including platinum, increases, so does the value of platinum ETFs.
Factors contributing to market demand include:
- Electric Vehicle (EV) Market: The growing EV market boosts the demand for platinum, as it is used in fuel cells (The Motley Fool).
- Semiconductor Usage: Platinum is also used in the semiconductor industry, which has seen increased demand due to technological advancements.
For more information on how market dynamics influence platinum prices, visit our detailed article on platinum supply and demand.
Automotive Sector Impact
The automotive sector significantly impacts platinum prices.
Platinum is a crucial component in automotive catalytic converters, which help reduce emissions. Hence, when automobile sales increase, the demand for platinum rises, driving up its price (Investopedia).
| Year | Global Auto Sales (Millions) | Platinum Price (USD/Ounce) |
|---|---|---|
| 2019 | 90 | 900 |
| 2020 | 78 | 850 |
| 2021 | 82 | 1,000 |
Check out our guide on platinum price prediction for more insights.
Global Economic Conditions
Global economic conditions also play a vital role in determining platinum prices.
Economic stability, geopolitical events, and supply chain disruptions can all impact platinum’s value. For instance:
- Primary Sources: The majority of platinum comes from South Africa, followed by Zimbabwe and Russia (Investopedia). Any political or economic instability in these regions can affect the supply and, consequently, the price.
- Market Volatility: Platinum prices are known to fluctuate significantly, often more than gold or silver (Investopedia). This inherent volatility can pose risks but also presents opportunities for savvy investors.
For strategies on mitigating these risks, explore our article on platinum investing strategies.
For additional investment opportunities and options, visit our page on platinum investment opportunities.
Risks and Considerations
Market Volatility
Platinum prices can be highly volatile, often fluctuating more than gold or silver.
This volatility is influenced by various factors, including market demand and the automotive sector.
As a result, the value of your platinum ETF investment can experience significant ups and downs.
Liquidity Concerns
Liquidity is a crucial factor when investing in platinum ETFs. ETFs with assets under management (AUM) of less than $50 million typically exhibit lower liquidity.
This can lead to higher trading costs and potentially diminish your investment gains or amplify losses (Investopedia).
For instance, the iPath Series B Bloomberg Platinum ETN (PGM) has low trading volume, which may result in higher trading costs.
| ETF | AUM (Million $) | Liquidity |
|---|---|---|
| GraniteShares Platinum Trust (PLTM) | 40 | Low |
| abrdn Physical Platinum Shares ETF (PPLT) | 500 | High |
| iPath Series B Bloomberg Platinum ETN (PGM) | 30 | Low |
Expense Ratios
Expense ratios are another important consideration when investing in platinum ETFs.
These ratios represent the annual fees that ETFs charge their shareholders.
The abrdn Physical Platinum Shares ETF (PPLT) has an expense ratio of 0.60%, while GraniteShares Platinum Trust (PLTM) has a lower expense ratio of 0.50% (Investopedia).
Higher expense ratios can eat into your investment returns over time.
| ETF | Expense Ratio (%) |
|---|---|
| GraniteShares Platinum Trust (PLTM) | 0.50 |
| abrdn Physical Platinum Shares ETF (PPLT) | 0.60 |
| iPath Series B Bloomberg Platinum ETN (PGM) | 0.75 |
For more information on how to invest in platinum, check out our guide on how to invest in platinum and explore platinum investing strategies.
How to Invest in Platinum ETFs
Choosing the Right ETF
When selecting a platinum ETF, it’s important to consider factors such as expense ratios, assets under management (AUM), and the specific focus of the ETF.
Here are some popular options:
| ETF Name | Ticker | Expense Ratio | AUM |
|---|---|---|---|
| GraniteShares Platinum Trust | PLTM | 0.50% | $40 million |
| abrdn Physical Platinum Shares ETF | PPLT | 0.60% | $1 billion |
| iPath Series B Bloomberg Platinum ETN | PGM | 0.75% | $25 million |
Figures courtesy Investopedia
Consider the following points when choosing an ETF:
- Expense Ratio: Lower expense ratios mean lower costs for you. For example, PLTM has an expense ratio of 0.50%, which is lower than PPLT’s 0.60%.
- Assets Under Management (AUM): ETFs with higher AUM tend to have better liquidity. PPLT has $1 billion in AUM, making it a more liquid option compared to PLTM and PGM.
- Investment Focus: Some ETFs may focus on physical platinum, while others might track platinum futures or a mix of assets. Choose one that aligns with your investment goals.
For more information on investment options, visit our section on platinum investment options.
Understanding Trading Costs
Trading ETFs involves costs beyond just the expense ratio.
Here are some costs to consider:
- Bid-Ask Spread: The difference between the buying price and the selling price. Lower spreads mean lower costs.
- Brokerage Fees: Fees charged by your broker for buying and selling ETFs.
- Liquidity: ETFs with lower AUM, like PGM with $25 million, typically have lower liquidity, leading to higher trading costs (Investopedia).
Always compare the total cost of ownership, including these hidden fees, to get a clear picture of your investment expenses.
Monitoring Performance
Once you’ve invested in a platinum ETF, it’s crucial to keep an eye on its performance. Here are some tips:
- Track Platinum Prices: Since ETFs track platinum prices, stay updated on market conditions. Check out our article on platinum price prediction.
- Review ETF Performance: Compare your ETF’s performance against benchmarks and other similar ETFs.
- Stay Informed: Keep abreast of factors influencing platinum prices, such as market demand and the automotive sector impact.
By choosing the right ETF, understanding trading costs, and monitoring performance, you can make informed decisions and optimize your investment in platinum ETFs. For more strategies, visit our section on platinum investing strategies.
Diversifying Your Portfolio
Combining with Other Metals
Platinum is just one of several precious metals you can invest in.
To create a well-rounded portfolio, consider combining platinum with other metals like gold, silver, and palladium.
Each metal has its own unique market dynamics, which can help balance your portfolio.
| Metal | Key Characteristics | Typical Use Cases |
|---|---|---|
| Platinum | High industrial demand, especially in automotive | Catalytic converters, jewelry |
| Gold | Often a safe haven asset | Jewelry, electronics, investments |
| Silver | High industrial and investment demand | Electronics, solar panels, jewelry |
| Palladium | Significant demand in automotive | Catalytic converters, electronics |
Investing in a mix of these metals can provide exposure to different market segments and reduce the impact of price volatility in any single metal.
For more information on combining metals in your portfolio, explore our article on platinum investment opportunities.
Balancing with Stocks and Bonds
Diversification isn’t just about metals; it’s also about balancing your investments with other asset classes like stocks and bonds.
Stocks offer growth potential, while bonds provide stability and income.
Including platinum ETFs in a diversified portfolio can add a layer of security against market fluctuations.
Consider these allocation examples:
| Asset Class | Conservative Portfolio | Balanced Portfolio | Aggressive Portfolio |
|---|---|---|---|
| Stocks | 30% | 50% | 70% |
| Bonds | 60% | 40% | 20% |
| Platinum ETFs | 10% | 10% | 10% |
Balancing your portfolio with stocks and bonds while including platinum ETFs can help achieve a more stable and diversified investment strategy.
Learn more about balancing your investments in our platinum investing strategies.
Long-term Investment Strategies
Platinum ETFs can be an integral part of your long-term investment strategy.
Due to the potential for market demand growth, especially from sectors like electric vehicles and semiconductors (The Motley Fool), platinum can offer substantial returns over time.
To maximize long-term growth, consider these strategies:
- Regular Contributions: Consistently invest a fixed amount in platinum ETFs to take advantage of dollar-cost averaging.
- Rebalancing: Periodically review and adjust your portfolio to maintain your desired asset allocation.
- Monitoring Market Trends: Stay informed about factors influencing platinum prices, such as global economic conditions and automotive sector impact.
For more insights, check out our guide on how to invest in platinum.
Diversifying your portfolio with platinum ETFs, other metals, stocks, and bonds can help you achieve a balanced and resilient investment strategy.
Whether you’re a seasoned investor or just getting started, these tips can guide you in making informed decisions to grow and protect your wealth.
