The traded value of an ETF share tracks the spot platinum price. As a result, an ETF investor can make money when the platinum price rises and lose money when it falls, in the same way that anyone who owns platinum in its physical form can.
Only some ETFs provide investors with the choice of converting their share into physical metal. Where this is possible, the investor is entitled to the portion of the vaulted platinum that equates to the underlying shareholding, and not a specific bar or bars.
Investing in a platinum ETF can be a convenient way to add platinum to a portfolio and benefit from its diversification characteristics, as well as profiting from any potential increases in the metal’s value related to changes in platinum’s diverse supply and demand fundamentals. In the UK, the US and Japan, platinum ETFs can be held as part of self-managed pension schemes, with possible associated tax benefits.
Positive impact on platinum demand
At the moment, holdings in platinum ETFs are experiencing a four year high at 3 moz. The recent surge in investors wanting exposure to platinum via physically-backed ETFs has had a direct impact on platinum demand. Platinum ETF demand in the first quarter of 2019 was over 690,000 oz.