New ETFs Enable Investment in a Bundle of Precious Metals

goldHeadlines about record gold prices are drawing investor attention to precious metals. Not surprisingly, precious metals ETFs (exchange-traded funds) have seen substantial money inflows over the last year.

Since the start of the year, about $8.4 billion has poured into commodities precious metals ETFs, with another $1 billion added to equity precious metal ETFs (funds that track mining companies), according to the most recent Morningstar fund flows update. More than $98 million of investor capital flowed into the commodities precious metals ETFs category in October.

Morningstar reported Wednesday that total assets in commodities precious metals ETFs jumped from $45 billion in October 2009 to $73 billion as of the end of October 2010.

"Interest on the institutional and retail side is growing on the heels of a lot of economic concerns over money supply, inflation fears and the desire to broaden exposure into commodities," said ETF Securities' managing director Fred Jheon, who helped announce the company's listing of GLTR, a precious metals basket ETF that contains shares of gold, silver, platinum and palladium, on the New York Stock Exchange on Tuesday. ETF Securities launched GLTR in October and launched ETFs for Palladium (PALL) and Platinum (PPLT) earlier this year.

Jheon said his company's newest product was developed because of investor demand for investments that provide exposure to all four precious metals. While the company offers ETFs that track each of the four precious metals separately, GLTR "gives investors access all four precious metals in one trade that is backed by the physical metal itself," he said.

Gaining access to four precious metals in one security can lower commission and trading costs – investors avoid paying commissions on four different trades of ETFs. The exposure to precious metals also acts as a hedge against the falling value of the U.S. dollar which continues to be under pressure as nations adjust policies in an effort to jump start their economies. Additionally, the precious metals ETFs add diversification to a portfolio through commodities, an asset class many investors fail to include in their portfolios as a way to lower overall risk.

But with next year's forecasts on precious metals all positive, any ETF in that category is likely to benefit investors. The most bullish recent precious metals price forecasts for 2011 have gold going as high as $1,600 an ounce, platinum as high as $2,000, palladium in the $700 range and silver reaching as high as $27 an ounce. Although the majority of forecasters predicted more modest price increases for the metals, all forecasts see sizable gains in precious metals next year.

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ETF,s is a group of people holding and taking money out of your earnings TO MANAGE THE ACCOUNT. Its like the 401k,s they take out manage fees and other hidden fees read the fine print, even when they do a buy or sell in 401k,s they get paid for them , most people don,t even understand that book you get with those 401k,s .. don,t get me wrong 401k,s were good to lots of people a few YEARS ago or if your retired 5 years ago and drawing out you money, the people that have them now are getting hit hard, these ETF,s are the same way, you pay to have others hold the paper. Screw them buy the raw stuff from a good dealer that will test and certify you gold or silver and Safe deposit boxes are really cheap in banks and you can own several boxes. Hold you stuff in them, when the price feels right to sell take the stuff out carry it to the buyer and sell the stuff GET YOU MONEY ON THE SPOT WITHOUT ANY COST TO YOU OR ANYONE TAKING OUT MANGING FEES. Be your own Bank pay yourself for making your own transactions instead some guy in a 1000 buck suit ******* your profits away to his bank account.

November 11 2010 at 10:21 PM Report abuse +4 rate up rate down Reply

Stay away from ETF's folks. HUGE RISKS that are just now coming to the fore. Watch CNBC and pay attention to what Goldberg is saying about them. STAY AWAY!

November 11 2010 at 9:59 PM Report abuse +2 rate up rate down Reply

I Invest in brass and lead thats my precious metal!

November 11 2010 at 8:19 PM Report abuse -1 rate up rate down Reply

What makes gold valuable ? At the beginning it was salt. If you had salt, you were rich. Then it was shells. If you had a lot of shells, etc. Silver, gold, platinum, diamonds, emeralds, pearls, etc are basically neo-lithic junk & one step higher than early man artifacts . So what is a good investment ? Well, that information is something I don't give away....Al-

November 11 2010 at 5:47 PM Report abuse +2 rate up rate down Reply
1 reply to alfredschrader's comment

It has/has had value as a monetary metal because it can't be made or easily destroyed. So the amount of it is fairly constant and predictable. Appart from that...well...don't wake the sleeping bear!

November 11 2010 at 10:06 PM Report abuse rate up rate down Reply

tmlbtb,,,, sory guy,,, but the dollar will never rise again, you cant print trillions and wish them away,,, this is the real world, where were all the people when the tea party tried to warn all,,,,, its poor city now, only sellected 50% will still live normal,,,, this obamas self made american hating destruction is a 30 year deal.

November 11 2010 at 5:33 PM Report abuse +1 rate up rate down Reply

jd, you got that right.

November 11 2010 at 5:30 PM Report abuse rate up rate down Reply

If all your investments are in one currency basket, you better hope the eggs were laid by the Golden Goose. There is always a way to pay for things with precious metals, they make small units of weight, the US mint makes 1/10 oz. gold as well as other sizes up to 1 oz. and even produces 90 % silver coins in 10, 25 and 50 cent coins as well as silver dollars, there could be a day when it will take a lot of dollars to buy staples and very few of these coins. Plus there are lots of older coins available. Most experts I read say to hold approx 10-30% of your assets in real metal you hold yourself. You could buy 140$ worth of groceries with a 1/10 Oz.

November 11 2010 at 4:38 PM Report abuse +3 rate up rate down Reply

this must be old news,,, silver is already at$27/ounce...

November 11 2010 at 3:53 PM Report abuse +2 rate up rate down Reply

It's all in the timing. The Fed is printing money to cheap'n the dollar so our exports will go up via the cheap currency exchange. Exports go up, companies begin to hire. So gold will keep rising until this changes, don't get caught with a bunch of bullion when the dollar begins to rise. Which may not happen for quite a while, all the Feds are doing is shooting in the dark, trying to get something to stick. Hell of a way to run a business.

November 11 2010 at 2:44 PM Report abuse +2 rate up rate down Reply

Sorry, Matt. This article is just another infomercial for gold companies and financial institutions to get business rolling again. I would like to see anyone go into the grocery store and pay for their 140 dollar grocery bill with a 5 dollar gold piece. As far as long term investment, what part of this country will be around in 20-30 years to cash the investment in for retirement or major medical funds anyway. The Feds just diluted our money, and likewise gold, by 600 billion a couple of weeks ago. I say invest locally. Use barter, and continue to rent. Maybe 10 years from now things will get better. But with Congress and Pres being what it is, all of them, I will not invest in improvement just yet.

November 11 2010 at 1:23 PM Report abuse +2 rate up rate down Reply