For centuries, people have owned precious metals as a representation of wealth. In the modern economy, these assets still offer obvious appeal. Beyond acting as a store of value in your portfolio, precious metals like silver and gold tend to be uncorrelated to the gyrations of stocks or other investments. This provides a hedge against declines and a way to more consistent long-term profits through diversification. Traders sometimes buy precious metals based on supply and demand dynamics. Whatever your motivation, it can be difficult to get a direct play on precious metals through bars and coins. But exchange-traded funds (ETFs) offer easy and affordable ways to invest in these assets.
SPDR Gold Trust
With a staggering $45 billion in assets, GLD (GLD) is not just the biggest of all the precious metals ETFs out there but also one of the most popular funds on Wall Street, period. It has been the go-to product to get a direct play on gold via ETFs since its formation in 2004, and it's designed to match the daily performance of gold bullion’s price. Physical gold has big appeal, but it's difficult to store and often hard to buy or sell if you own a significant amount. For most investors, GLD is an ideal way to get exposure to this asset without the hassle of a large physical store of coins or bars.
iShares Silver Trust
A similar vehicle to GLD, this iShares fund (SLV) is focused on silver bullion instead of gold. It is nearly as old, with first trades occurring in 2006, and is benchmarked to a physical metal in the same way. And since gold is more valuable per ounce, SLV's smaller assets still amount to a massive trove of the precious metal – specifically, its current size of roughly $6.2 billion adds up to roughly 3.5 million tons of the metal. Silver is a bit more utilitarian than gold, with real-world applications including industrial and technological uses. That offers more built-in demand for the metal that could make it more appealing for certain investors.
Aberdeen Standard Physical Platinum Shares ETF
Though perhaps not as high profile as silver and gold, platinum is actually more valuable by weight with a current price of more than $1,000 per ounce. It's also a great hybrid with a luxury appeal as well as industrial and electronics applications thanks to its characteristics as an efficient conductor. You may need less platinum per ounce to build up a significant stake in the metal, but it's just as hard to trade in physical form as gold bars and coins. If you want to invest in platinum, then, this ETF (PPLT) may be the most practical. And it's the largest physical platinum fund with some $700 million in assets at present.
Aberdeen Standard Physical Palladium Shares ETF
You may not necessarily recognize palladium as a precious metal, but it's worth paying attention to for two reasons. At more than $2,500 at current prices, it's more than twice as valuable per ounce than platinum. And perhaps more importantly to investors, palladium has simply been on a tear in the last 12 months – with this PALL (PALL) fund up more than 80%. Though perhaps not as well-known as gold that's used in luxury goods, palladium is similar to platinum in its effective conductivity and use in industrial applications. Plus, its relative rarity makes it in high demand but relatively small supply.
VanEck Vectors Rare Earth/Strategic Metals ETF
Speaking of rarity and challenges with supply, this is an ETF that is increasingly interesting to many investors in a high-tech age. It involves a basket of rare earth minerals such as molybdenum, a mineral with one of the highest melting points of any element, or various lanthanides that are superconductors and particularly useful in cutting edge electronics. The appeal here is right in the name – these elements are rare, but their application is real and growing. REMX (REMX) doesn't hold physical stakes in these commodities since many are too arcane to trade independently, but it does hold some of the bigger rare earth miners and is well-positioned to profit from these market dynamics.
VanEck Vectors Gold Miners ETF
Sticking with the theme of playing precious metals by a focus on miners, GDX (GDX) offers a play that is tied to the companies that extract gold and other materials from the ground instead of the physical metal itself. While gold mining is a key business for these firms, it's not the only one as they bring other minerals such as zinc or copper to market. These ores tend to exist in proximity to gold, and it's relatively easy to mine them at the same time. Some precious metals investors prefer this approach because conditions are quantifiable in terms of profits and sales – unlike gold bullion, which has no similar fundamentals behind it.
Aberdeen Standard Physical Precious Metals Basket Shares ETF
Having trouble picking a flavor of precious metal investing? Well, this one-stop fund (GLTR) from Aberdeen allows investors to play a basket of precious metals. Currently, that includes a roughly 55% weighting toward gold, a more than 20% weighting in silver and a portfolio rounded out with platinum and palladium. If you're looking for a single position to offer diversification across the universe of precious metals, GLTR is a simple way to do that. And with more than $500 million in total assets, investors can have confidence that this is not a fly-by-night fund.
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