How ASX investors can use the ETPMPM ETF
The ETFS ETPMPM ETF provides investors with access to the precious metal market, by seeking to achieve a return equivalent to the movements in the spot prices of four precious metals: gold, silver, platinum, and palladium – before fees and expenses.
ETPMPM could be used by investors to diversify a portfolio with precious metals, of which are typically uncorrelated with other asset classes. In this way, ETPMPM could be used as a hedge against risk. It could also be used by investors to profit from a view that the prices of gold, silver, platinum and palladium will rise in the future.
The ETPMPM ETF is yet to reach scale
The ETF Securities ETPMPM ETF had $58.36 million of money invested when we last pulled the monthly numbers. With a funds under management (FUM) or ‘market cap’ figure of less than $100 million, it’s important to consider if this ETF is still too small.
We say an ETF with more than $100 million invested is typically more sustainable than one with less than $100 million (at least). This is because if an ETF is too small, it may not be sustainable for an ETF issuer/provider, such as ETF Securities, to continue to operate it.
That said, there are exceptions to this rule of thumb, especially if the ETF issuer is committed to growing the ETF’s FUM to the point where it becomes profitable.
ETPMPM ETF fees explained
ETF Securities charges investors a yearly management fee of 0.44% for the ETPMPM ETF. This means that if you invested $2,000 in ETPMPM for a full year, you could expect to pay management fees of around $8.80.
For context, the average management fee (MER) of all ETFs covered by Best ETFs Australia on our complete list of ASX ETFs is 0.51% or around $10.20 per $2,000 invested. Keep in mind, small changes in fees can make a big difference after 10 or 20 years.
Putting it all together
If you’re weighing up investing in ETPMPM, keep in mind that this is just a brief introduction to the ETF. To supercharge your research, take a look at our free ETF Securities ETPMPM report. Then, consider searching our complete list of ASX ETFs for similar ETFs in the Commodities sector to compare your options.
So how can you actually invest in the ETPMPM ETF? In the month of September 2022, you can buy the ETPMPM ETF and get free brokerage with Pearler. All you have to do is buy and hold the ETF for 12 months! You can invest as little as $500. To buy ETPMPM for free click here to go to Pearler and sign up (hint: it’s also free to get an account).
