Platinum ETF Platinum ETF investing

18Jan/120

PLTM First Trust ISE Global Platinum review

Tracks a platinum group mining company stock index
Management fee (expense ratio): 0.70%

PLTM is an ETF, and owns commom stock in platinum group metals public companies.
It tracks the ISE Global Platinum Index, and the assets consist of about 90% common stocks of the companies that the index is based on. This gives investors the possibility to invest in the companies that are involved in platinum group metals. It is thus not a pure platinum ETF, but also concerns palladium, osmium, iridium, ruthenium and rhodium. This is a non-diversified fund.

PLTM review

The chart of PLTM from early 2011 to January 2012.

PLTM has assets worth just over $7 million, and is invested in, among others: Johnson Matthey, Anglo American Platinum, Impala Platinum Holdings, African Rainbow Minerals, Lonmin and Norilsk.

The fund's inception date is March 11th, 2010.

Daily volume is around 9000, which means that the liquidity is low.

PLTM provides a way of investing in the platinum group metals via an ETF.

Platinum-ETF.net comment: PLTM is a convenient way of tracking the whole platinum group sector. Note that this may be quite different from investing in the platinum price through a platinum ETF, as there is no set correlation between the platinum price and the performance of these companies. In 2008, for instance, the mining companies worldwide plummeted in price more than the price of platinum.
Liquidity is low.
The annual expense ratio of 0.70% seems appropriate in comparison with other ETFs.
Platinum-ETF.net grade: C+

18Jan/120

PTD E-TRACS UBS Short Platinum ETN review

Tracks the platinum price inversed by buying futures contracts
Management fee (expense ratio): 0.65%
Tracking error: 4.65%
Net Asset Value (January 2012): $3.44 million

PTD is a platinum ETN (exchange-traded note), which means that it behaves much like an ETF, but is technically a debt note and not a fund.

PTD chart

The daily chart for PTD from early 2011 to January 2012.

PTD is not backed by physical platinum, and has a value of around $3.4 million (December 2011). It tracks the platinum price and the inverse performance of the UBS Bloomberg CMCI Platinum Excess Return index by being exposed to platinum futures and is intended to reflect the inverse returns of the futures contracts on platinum. The annual fee is 0.65%.

PTD was launched in May of 2008.

Like all inverse platinum ETFs and ETNs, PTD is designed for those who wish to short sell platinum without having to hold the physical metal.

While ETFs have tracking risk, ETNs like PTD have credit risk. There is a possibility, although unlikely, that the issuing bank (UBS in the case of PTD) may go bankrupt and take some of the value of the ETN with it. This credit risk should be balanced against the tracking risk of ETFs, which means that the valuation of the ETF may be slightly different than the underlying index. The credit risk of ETNs is no different from the credit risk that is associated with most other investment products and derivatives.

Depending on local tax legislation, an ETN may be more tax efficient than an ETF.

Liquidity of PTD is low, with daily volume around 700.
The security can be traded throughout the day like a stock, and it is also possible to sell it short.
The lack of diversification that is a part of any single commodity-tracking ETF or ETN means that concentration risk is 100% for PTD.

Platinum-ETF.net comment: This platinum ETN is not backed by physical platinum, but tracks the inverse of the platinum price (technically, the UBS Bloomberg CMCI Platinum Excess Return) by being involved in the market of platinum futures. For the layman investor, this process is considerably more difficult to comprehend than a physically backed ETF. The credit risk associated with this structure (ETN) can be an issue for very conservative investors. The expense ratio of 0.65 appears reasonable, compared to other ETNs. The low liquidity may be a drawback for some investors. US investors may enjoy tax advantages from an ETN relative to an ETF.
PTD is traded on NYSE Arca in the US.
Platinum-ETF.net grade: C+

11Jan/120

IPLT – VelocityShares 2x Inverse Platinum ETN Review

Tracks the platinum price by buying futures contracts
Leveraged 2x inverse
Management fee (expense ratio): 1.35%

IPLT is an ETN (exchange-traded note), which means that it behaves like an ETF, but is technically a debt note and not a fund.

This platinum ETF is inversely leveraged by a factor of 2, meaning that the fluctuations are twice the magnitude and opposite of the index it tracks (S&P GSCI Platinum Index ER).

IPLT chart

A chart for IPLT since its inception in 2011.

IPLT is not backed by physical platinum, but tracks a platinum price index by being exposed to platinum futures and is intended to reflect the returns that are potentially available through an inverted, leveraged investment in the futures contracts on platinum. While that process shouldn't require much active management, the expense ratio of 1.35% appears high. This is the only leveraged short platinum ETF/ETN currently available.
PTM was launched in October of 2011, and is issued by VelocityShares. It tracks the S&P GSCI Platinum Index ER.

IPLT is designed for those who wish to short platinum. There are no tracking errors with ETNs, as opposed to ETFs, which can sometimes stray a little from the index or commodity price. This security is intended for sophisticated investors.

While ETFs have tracking risk, ETNs like IPLT have credit risk. There is a possibility, although unlikely, that the issuer bank (Credit Suisse in the case of IPLT) may go bankrupt and take some of the value of the ETN with it. This credit risk should be balanced against the tracking risk of ETFs, which means that the valuation of the ETF may be slightly different than the underlying index. The credit risk of ETNs is no different from the credit risk that is associated with most other investment products and derivatives.

Depending on local tax legislation, an ETN may be more tax efficient than an ETF.

Liquidity of IPLT is low, with daily volume around 2,000.
The security can be traded throughout the day like a stock.
The lack of diversification that is a part of any single commodity-tracking ETF or ETN means that concentration risk is 100% for IPLT. In other words, the investor should be willing to lose 100% of his investment.

It is in the nature of selling short, especially with leverage, that any losses can quickly reach high levels. This platinum ETF should only be bought by sophisticated investors.

Platinum-ETF.net comment: This platinum ETF is leveraged 2x and inverse. It increases in value if the platinum index (the S&P GSCI Platinum Index ER) decreases, and the magnitude is double. It tracks the index by being involved in the market of platinum futures. For the layman investor, this process is considerably more difficult to comprehend than a physically backed ETF. The credit risk associated with this structure (ETN) can be an issue for very conservative investors. The expense ratio of 1.35% appears relatively high, but this is a unique platinum ETF in that it is the only 2x leveraged inverse platinum ETF currently available. The double leverage doubles the potential profit from a decrease in the platinum price, and the risk is correspondingly high. The low liquidity may be a drawback for some investors. US investors may enjoy tax advantages from an ETN relative to an ETF.
IPLT is traded on NYSE Arca in the US.
Platinum-ETF.net grade: B-

9Jan/120

LPLT – VelocityShares 2x Long Platinum ETN Review

Tracks the platinum price by buying futures contracts
Leveraged 2x
Management fee (expense ratio): 1.35%

Net Asset Value (January 2012): $2.88 million

LPLT is an ETN (exchange-traded note), which means that it behaves like an ETF, but is technically a debt note and not a fund.

This platinum ETF is leveraged by a factor of 2, meaning that the fluctuations are twice the magnitude of the index it tracks.

Chart for the LPLT platinum ETF

A chart for LPLT since the inception i 2011.

LPLT is not backed by physical platinum, and has a value of around $2.8 million (December 2011). It tracks a platinum price index by being exposed to platinum futures and is intended to reflect the returns that are potentially available through a leveraged investment in the futures contracts on platinum. While that process shouldn't require much active management, the expense ratio of 1.35% appears high. This is the only leveraged long platinum ETF/ETN currently available.
PTM was launched in October of 2011, and is issued by VelocityShares. It tracks the S&P GSCI Platinum Index ER.

Like all platinum ETFs and ETNs, LPLT is designed for those who wish to invest in platinum without having to hold the physical metal. There are no tracking errors with ETNs, as opposed to ETFs, which can sometimes stray a little from the index or commodity price.

While ETFs have tracking risk, ETNs like LPLT have credit risk. There is a possibility, although unlikely, that the issuer bank (Credit Suisse in the case of LPLT) may go bankrupt and take some of the value of the ETN with it. This credit risk should be balanced against the tracking risk of ETFs, which means that the valuation of the ETF may be slightly different than the underlying index. The credit risk of ETNs is no different from the credit risk that is associated with most other investment products and derivatives.

Depending on local tax legislation, an ETN may be more tax efficient than an ETF.

Liquidity of LPLT is low to moderate, with daily volume around 4,000.
The security can be traded throughout the day like a stock, and it is also possible to sell it short.
The lack of diversification that is a part of any single commodity-tracking ETF or ETN means that concentration risk is 100% for LPLT.

Platinum-ETF.net comment: This platinum ETF is not backed by physical platinum, but tracks the platinum price (technically, the S&P GSCI Platinum Index ER) by being involved in the market of platinum futures. For the layman investor, this process is considerably more difficult to comprehend than a physically backed ETF. This product tracks its underlying index without error. Tracking risk is thus zero. The credit risk associated with this structure (ETN) can be an issue for very conservative investors. The expense ratio of 1.35% appears relatively high, but this is a unique platinum ETF in that it is the only long leveraged platinum ETF currently available. The double leverage doubles the potential profit from an increase in the platinum price, and the risk is correspondingly high. The low liquidity may be a drawback for some investors. US investors may enjoy tax advantages from an ETN relative to an ETF.
LPLT is traded on NYSE Arca in the US.
Platinum-ETF.net grade: B-

9Jan/120

PGM – iPath DJ-UBS Platinum Subindex Review

Tracks the platinum price by buying futures contracts
Management fee (expense ratio): 0.75%

Net Asset Value (January 2012): $30 million

Like PTM, PGM is an ETN (exchange-traded note), which means that it behaves like an ETF, but is technically a debt note and not a fund.

PGM chart

The daily chart for PGM from early 2011 to January 2012

PGM is not backed by physical platinum, and has a value of around $30 million (December 2011). It tracks a platinum price index by being exposed to platinum futures and is intended to reflect the returns that are potentially available through an unleveraged investment in the futures contracts on platinum. While that process shouldn't require much active management, the expense ratio of 0.75% is higher than the physically-backed platinum ETF PPLT (0.60%) and the platinum ETN PTM (0.65%), which is similar to PGM is most respects.

PTM was launched in June of 2008, and is a product of iPath, a brand of Barclays Bank. It tracks the Dow Jones-UBS Commodity Index Total Return.

Like all platinum ETFs and ETNs, PTM is designed for those who wish to invest in platinum without having to hold the physical metal. There are no tracking errors with ETNs, as opposed to ETFs, which can sometimes stray a little from the index or commodity price.

While ETFs have tracking risk, ETNs like PGM have credit risk. There is a possibility, although unlikely, that the issuing bank (Barclays Bank in the case of PGM) may go bankrupt and take some of the value of the ETN with it. This credit risk should be balanced against the tracking risk of ETFs, which means that the valuation of the ETF may be slightly different than the underlying index. The credit risk of ETNs is no different from the credit risk that is associated with most other investment products and derivatives.

Depending on local tax legislation, an ETN may be more tax efficient than an ETF.

Liquidity of PGM is low to moderate, with daily volume around 4,000.
The security can be traded throughout the day like a stock, and it is also possible to sell it short.
The lack of diversification that is a part of any single commodity-tracking ETF or ETN means that concentration risk is 100% for PGM.

Platinum-ETF.net comment: This platinum ETF is not backed by physical platinum, but tracks the platinum price (technically, the Dow Jones-UBS Commodity Index Total Return SM) by being involved in the market of platinum futures. For the layman investor, this process is considerably more difficult to comprehend than a physically backed ETF. This product tracks its underlying index without error. Tracking risk is thus zero. The credit risk associated with this structure (ETN) can be an issue for very conservative investors. The expense ratio of 0.75 appears relatively high, especially as compared to the very similar platinum ETF PTM. The low liquidity may be a drawback for some investors. US investors may enjoy tax advantages from an ETN relative to an ETF.
PGM is traded on NYSE Arca in the US.
Platinum-ETF.net grade: B-

9Jan/120

PTM – UBS E-TRACS CMCI Long Platinum Total Return ETN Review

Tracks a platinum price index by buying futures contracts
Management fee (expense ratio): 0.65%
Net Asset Value (January 2012): $32 million

PTM chart

The daily chart for PTM from early 2011 to January 2012

PTM is an ETN (exchange-traded note), which means that it behaves like an ETF, but is technically a debt note and not a fund.
This is the largest platinum ETF/ETN that's not backed by physical metal, and has a value of around $32 million (December 2011). It tracks a platinum price index by being exposed to platinum futures. While that process doesn't require much active management, the expense ratio of 0.65% is higher than the physically-backed PPLT.
PTM was launched in March of 2008, and is a product of the giant Swiss bank UBS. It tracks the UBS Bloomberg CMCI Platinum Total Return Index.

Like all platinum ETFs and ETNs, PTM is designed for those who wish to invest in platinum without having to hold the physical metal. There are no tracking errors with ETNs, as opposed to ETFs, which can sometimes stray a little from the index or commodity price.

While ETFs have tracking risk, ETNs like PTM have credit risk. There is a possibility, remote though it is, that the issuing bank (UBS in the case of PTM) may go bankrupt and take some of the value of the ETN with it. This credit risk should be balanced against the tracking risk of ETFs, which means that the valuation of the ETF may be slightly different than the underlying index. The credit risk of ETNs is no different from the credit risk that is associated with most other investment products and derivatives.

Depending on local tax legislation, an ETN may be more tax efficient than an ETF.

Liquidity of PTM is moderate, with daily volume around 15,000.
The security can be traded throughout the day like a stock, and it is also possible to sell it short.
The lack of diversification that is a part of any single commodity-tracking ETF or ETN means that concentration risk is 100% for PTM.

Platinum-ETF.net comment: This platinum ETF is not backed by physical platinum, but tracks the platinum price (technically, the UBS Bloomberg CMCI Platinum Total Return Index) by being involved in the market of platinum futures. For the layman investor, this process is considerably more difficult to comprehend than a physically backed ETF. This product tracks its underlying index without error. Tracking risk is thus zero. The credit risk associated with this structure (ETN) can be an issue for very conservative investors. The expense ratio of 0.65 appears relatively high. The moderate liquidity may be a drawback for some investors. US investors may enjoy tax advantages from an ETN relative to an ETF.
PTM is traded on NYSE Arca in the US.

Platinum-ETF.net grade: B

5Jan/120

PPLT – ETFS Physical Platinum Shares review

Tracks the price of physical platinum
Management fee (expense ratio): 0.60%
One share is entitled to approximately 0.1 ounce of platinum
Net Asset Value (January 2012): $662 million

PPLT chart

The daily chart for PPLT from mid-2010 to early 2012.

This was the first platinum ETF that was backed by physical metal. It was launched in January of 2010, and holds platinum in the form of bullion and ingots. The precious metal is securely stored in London and Z├╝rich of behalf of the custodian, JP Morgan Chase Bank. The bars and ingots are individually identified and segregated. The platinum is inspected biannually by an independent assayer.

This ETF is designed for investors who wish to invest in platinum in a convenient and cost-effective way. One of the main points is that the transaction costs for buying and storing the shares will be considerably lower than acquiring, storing and insuring the physical platinum. It reliably tracks the platinum price.

The liquidity of this platinum ETF is good, and average trade volume is around 80 000 shares. The ETF shares are traded on an exchange like a stock or any other exchange-traded investment security.

The structure allows for shares to be created and redeemed based on market conditions.

It is in the nature of this physically-backed platinum ETF to not be diversified. Concentration risk is thus 100%.

Platinum-ETF.net comment: This is the first and only physically-backed platinum ETF available to investors today (2012). It is also by a wide margin the largest and most liquid platinum ETF, and provides investors with an easy, convenient, safe and liquid way of investing in platinum without having to hold, buy, store and insure physical metal. The expense ratio of 0.60 % is low compared to mutual funds and to the cost of holding physical platinum.
PPLT is listed on several exchanges, and trades on NYSE Arca in the US.
Buying and selling this ETF is as easy as buying any other stock, and makes the PPLT arguably the best way of investing in platinum.

Platinum-ETF.net grade: A