Best precious metals ETF for the first quarter of 2022

Precious metals such as gold, silver and platinum are seen by many investors as a safe haven against inflation or economic turmoil. They are also valued for their rarity and use in a wide range of industrial applications. Precious metals exchange-traded funds (ETFs) are a popular way to invest in these metals through physical or futures exposure. Compared with buying futures contracts, buying gold and silver, or buying shares of listed companies involved in the exploration or production of these metals, ETFs can provide a more liquid and simple way to invest in precious metals.

Key points

  • The performance of the precious metals market in the past year has lagged significantly behind the U.S. stock market.
  • The precious metals exchange-traded funds (ETF) that track the best total returns in a year are PPLT, SIVR, and SLV.
  • The only holding of the first ETF is platinum, and the only holding of the other two funds is silver.

There are 15 precious metal ETFs traded in the United States, excluding reverse and leveraged ETFs and funds with assets under management (AUM) of less than US$50 million. These ETFs invest in physical precious metals, not the stocks of precious metal mining companies. As of November 9, 2021, the benchmark S&P GSCI precious metals index has significantly underperformed the broader market in the past 12 months, with a total return of -1.9%, while the S&P 500’s total return was 33.9%. Based on the performance of the past year, the best-performing precious metals ETF in the first quarter of 2022 is the Aberdeen Standard Physical Platinum Shares ETF (PPLT). We have checked the three best precious metals ETFs below. All figures are as of November 9, 2021.

  • Performance over one year: 22.0%
  • Expense rate: 0.60%
  • Annual dividend yield: Not applicable
  • Three-month average daily volume: 122,395
  • Assets under management: US$1.3 billion
  • Date of establishment: January 8, 2010
  • Publisher: abrdn (formerly Standard Life Aberdeen)

The structure of PPLT is a grantor trust, which provides some tax protection for investors. It is designed to track the spot price of platinum. Platinum is a precious metal that is difficult for investors to obtain. PPLT is one of the only options for platinum exposure except for futures contracts, individual platinum coins and platinum mining company stocks. Platinum is also highly related to the automotive industry, so it tends to be highly cyclical. PPLT’s platinum bars are stored in a vault in London. The metals are stored in the allocated bars, and the bar list is published every day.

  • Performance over one year: 0.3%
  • Expense rate: 0.30%
  • Annual dividend yield: Not applicable
  • 3-month average daily volume: 536,642
  • Assets under management: USD 1 billion
  • Date of establishment: July 24, 2009
  • Publisher: abrdn (formerly Standard Life Aberdeen)

The structure of SIVR is a grantor trust, which is backed by silver bullion held in the vault on behalf of the investor. Its goal is to track the performance of silver prices minus trust operating expenses. Since it only holds physical silver, the fund does not use futures contracts. Like other silver ETFs, SIVR may be a useful safe haven during periods of market uncertainty, but as a long-term buy-and-hold investment, it may not be attractive. SIVR’s single holding is silver.

  • Performance over one year: 0.1%
  • Expense rate: 0.50%
  • Annual dividend yield: Not applicable
  • 3-month average daily volume: 24,335,584
  • Assets under management: $13.2 billion
  • Date of Establishment: April 21, 2006
  • Issuer: BlackRock Financial Management

Like SIVR, SLV is a grantor trust that holds physical silver on behalf of investors. The trust provides investors with exposure to daily changes in silver prices. Since it does not use futures contracts, the fund is not affected by spot premiums or futures premiums. Like SIVR, it may be attractive to investors as a safe haven during market turmoil. SLV’s single holding is silver.

The comments, opinions and analysis expressed here are for reference only and should not be regarded as personal investment advice or advice on investing in any securities or adopting any investment strategy. Although we believe that the information provided here is reliable, we do not guarantee its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Due to the rapidly changing market and economic conditions, all comments, opinions and analyses contained in our content are presented on the date of publication and may change without notice. This material is not intended to provide a complete analysis of every important fact about any country, region, market, industry, investment or strategy.

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