Investors who have been looking for access to platinum and palladium via an exchange traded product finally can have it with the ELEMENTS MLCX Precious Metals Index (PMY) exchange traded note (ETN), listed on NYSE Euronext.
The fund follows the MLCX Precious Metals Index, which provides a benchmark for the precious metals sector, including gold, silver, platinum and palladium. Platinum and its rising price, in particular, have generated much interest among investors. For reasons of liquidity, it’s unlikely the United States will have an exchange traded fund (ETF) that would hold futures for the rare metal. It’s in such short supply that the potential is there for investors to dictate and control the market, says Kevin Rich, CEO of DB Commodity Services.
ELEMENTS has also listed the ELEMENTS Credit Suisse Global Warming Index ETN (GWO), which offers exposure to the stocks of companies that have increased focus on products and services related to easing the effects of global warming.
ETFs and ETNs are cousins, but they operate in different ways: ETNs are debt securities with a stated maturity date. With them, an investor is assuming market risk along with the risk that the ETN’s issuer might not be able to pay up when the time comes.
These ETNs join a growing list of exchange traded products that offer exposure to commodities and target the "green" sector, including:
- First Trust NASDAQ Clean Edge (QCLN)
- PowerShares Cleantech Portfolio (PZD)
- Market Vectors Environmental Services (EVX)
- streetTRACKS Gold Shares (GLD)
- iShares Silver Trust (SLV)
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.