The ETF is backed by bullion — it doesn’t invest in futures. The fund has an expense ratio of 0.60% and holds $234 million in assets. [ETF Chart of the Day: Precious Metals Basket]
“Among commodities, precious metals have been widely adopted as inflationary hedges and ‘safe-haven’ assets because of their traditional store of value,” says Morningstar analyst Abraham Bailin in a profile of ETFS Physical Precious Metal Basket Shares. “Investors should be aware, however, that despite their ‘precious metals’ designations, price performance of silver, platinum, and palladium is driven to a large extent by industrial demand. On this basis, prices are likely to exhibit a high degree of sensitivity to economic ups and downs.”
He also notes that income or expenses on the ETF are taxed as “collectibles” at a maximum rate of 28%. Long-term gains on bullion-backed ETFs can be taxed at a higher rate than stocks.
ETFS Physical Precious Metal Basket Shares
Tisha Guerrero contributed to this article.