ETF Spotlight on ETFS Physical Precious Metals Basket Shares (NYSEArca: GLTR), part of a weekly series.
Assets: $213.0 million
Objective: ETFS Physical Precious Metals Basket Shares (“the Shares”) tries to reflect the performance of the prices of a basket of precious metals commodities, including gold, silver, platinum and palladium bullion.
Holdings: The Trust holds physical allocated gold, silver, platinum and palladium bullion in vaults by the custodian JP Morgan Chase Bank. Gold and silver are held in London and the platinum and palladium are held in London or Zurich.
What You Should Know:
- GLTR is a commodity-based physically-backed exchange traded fund (ETF).
- The ETF has an expense ratio of 0.60%.
- The fund is relatively new. It started trading on October 22, 2010.
- Within the fund, each basket at 50,000 shares is equivalent to 1,496.37 oz of gold, 54,866.86 oz of silver, 199.52 oz of platinum and 299.27 oz of palladium. Each share of GLTR represents 0.03 oz of gold, 1.1 oz of silver, 0.004 oz of platinum and 0.006 oz of palladium, writes Mark Salzinger for The Stock Advisors.
- Due to the fund’s heavier weighting in gold, gold prices will be the main driver in the fund’s performance.
- As economies grow, industrial demand for silver, platinum and palladium will likely rise, whereas gold’s appeal as a “safe-haven” investment against uncertainty and volatility would drop. Platinum and palladium are components in catalytic converters for automobiles.
- The fund could be used as an inflation hedge.
- As of March 17, 2011, the net asset value (NAV) was 90.86899, and as of March 21, 2011, the last price was 92.25.
- Gold prices rose after the earthquake in Japan renewed interest in safe-haven investing of the metal. The fear of rising inflation has been fueling the rise in prices of gold, as well. [What Gold to Own With ETFs.]
- George Albino at Canadian institutional brokerage GMP Securities stated, “while we do not have a crystal ball, we do believe that any spread in the current unrest in North Africa/Mideast could have a very significant impact on short-term and…long-term gold prices.” [Behind the Surge in Gold and Silver ETFs.]
- Palladium was the strongest performer at year’s end, almost doubling over 2010 from just above $400/oz at the start of 2010, to finish the year testing the $800/oz mark. Increased auto sales in China and a growing trend toward platinum jewelry, which is more durable than gold jewelry. Slow mine supply growth and uncertainty in the global economy are also lending support to prices and investor interest. [Gold Who? Platinum and Palladium ETFs Shine.]