Home > Sprott’s Physical Platinum and Palladium Trust Debuts (SPPP, PALL, PPLT)

Sprott’s Physical Platinum and Palladium Trust Debuts (SPPP, PALL, PPLT)

December 27th, 2012

Stoyan Bojinov: As the end of the year draws closer, tensions in Washington D.C. are starting to boil as gridlock may push us over the much-feared “fiscal cliff” and back into recession. Diminishing hopes that policymakers can strike a deal before the deadline has kept a lid on confidence while prices have remained fairly stable, which may be setting up stock markets for a disastrous open in 2013. Amid the mixed landscape, Toronto-based Sprott Asset Management rolled out a physical platinum and palladium fund on the NYSE.

Sprott’s Physical Platinum and Palladium Trust (NYSEARCA:SPPP) marks another stride forward in the democratization of the commodity asset class. Investors should note, however, that amid the wave of ETF launches, Sprott’s offering is actually a closed-end fund. This means that SPFF can trade at a premium or a discount to its NAV for prolonged periods of time since the number of shares outstanding is static when compared to an ETF, which instead relies on the dynamic creation/redemption mechanism.

SPPP comes with a 0.50% annual price tag, which is quite competitive considering that its closest ETF-counterparts both charge a steeper fee. Like other Sprott metals funds, SPPP boasts a redemption feature that allows investors to redeem their shares for physical platinum and palladium, a feature that some find incredibly appealing.

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Ways To Play

Investors looking to gain exposure to platinum and palladium, but who wish to steer clear of futures contracts, may opt for two existing exchange-traded funds offered through ETF Securities:

  • Physical Platinum Shares (NYSEARCA:PPLT): This ETF is designed to track the spot price of platinum bullion and charges 0.60% in annual expense fees.
  • Physical Palladium Shares (NYSEARCA:PALL): This ETF is designed to track the spot price of palladium bullion and also features a price tag of 0.60%.

Written By Stoyan Bojinov From CommodityHQ  Disclosure: No Positions.

CommodityHQ offers educational content, analysis, and commentary on global commodity markets. Whether you’re looking to speculate on a short-term jump in crude or establish a long-term allocation to natural resources, CommodityHQ has the information you need.



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