How to invest in Platinum
Rare and with unique properties, platinum is in demand as both an industrial and precious metal. There are many reasons to consider platinum as an investment.
A long-term store of value
Rarer than gold, platinum is recognised globally as an enduring symbol of quality and value.
A portfolio diversifier
Depending on individual investment goals, platinum can help provide diversification given its combination of precious and industrial attributes.
Accessible
A wide range of options exists for both private and professional investors, and low minimum investment levels are possible.
Supply/Demand balance
The platinum market is currently in deficit due to strong demand drivers, including the growing hydrogen economy, and constrained supply.
Currency Hedge
In certain circumstances, an investment in platinum can help protect against fluctuating exchange rates.
Investment options range from:
PLATINUM BARS AND COINS
Platinum bullion bars and coins are a straightforward and widely available way of adding physical platinum investment to a portfolio.
Platinum bullion is an umbrella term that refers to two types of investment products – bars and coins – which share common characteristics, with guaranteed purity, generally 99.95 per cent, being the key criterion.
Easily bought and sold
Guaranteed purity of 99.95% platinum
Range of sizes and fractional coins are available
Option of delivery to door or safekeeping in a specialist vault
Can be purchased from Sovereign mints such as the US Mint, the Royal Canadian Mint or The Royal Mint in the UK
Can be directly included in an Individual Retirement Account (IRA) in some jurisdictions including the US
EXCHANGE TRADED FUNDS
Exchange Traded Funds (ETFs) are listed entities that issue shares which can be traded on an exchange, meaning that prices can vary throughout the day.
Investors can buy and sell shares in a physically-backed platinum ETF, either directly from the stock exchange it is listed on or through a broker.
Minimum investment of just one share
In the UK, the US and Japan, platinum ETFs can be held as part of self-managed pension schemes, with possible associated tax benefits
Vaulted platinum bars are the only assets of the fund and reflect the platinum price, less fees – which are typically well below one percent per annum
Value of shares held is 100 per cent matched by physical platinum in the form of investment bars held in a highly secure vault
ETFs allow an individual or asset manager to invest in physical platinum without incurring additional costs, such as insurance premiums and storage
PLATINUM ACCUMULATION PLANS
Unique to Japan, platinum accumulation plans (PAPs) enable individuals to pay a monthly amount into an account in order to purchase platinum, a core part of their retirement savings.
Retail investors in Japan have been investing in precious metals for decades, with the purchase of kilogram and smaller platinum ingots produced by Japanese precious metals refiners and, more latterly, through exchange traded funds.
Each month the balance of physically-owned platinum accrues
Investors are free to sell all or part of their balance, or withdraw it in the form of bullion, coins or jewellery at any time
ONLINE INVESTMENT
Online bullion accounts enable investors to purchase, store and sell physical platinum bullion and other precious metals via a trading platform.
Any eligible person, anywhere in the world, can buy, store and sell physical platinum through the platform in a secure and cost-effective way. The platinum offered meets the ‘Good Delivery’ requirements as specified by the London Platinum and Palladium Market.
Multiple currency options
Option of delivery
Platform can be accessed 24/7
Platinum is stored in fully-insured, low- cost, high-security vaults
Low minimum investment: trade as little as 1 gram at a time
Blockchain technology can be used to facilitate digitally recorded fractional ownership of platinum
FUTURES, MINING STOCKS & SHARES
In addition to owning physical platinum, investors can gain indirect exposure to platinum.
Futures
Platinum futures are financial products that allow participants to lock in a future platinum price by entering into a binding contract to buy (or sell) an amount of platinum at a fixed price at a future date.
Investors can then either exercise the contract on its expiry date or - depending upon their view of the market - trade the underlying contract, potentially allowing them to make a profit (or loss), subject to market movements.
Futures are not physically-backed, although contracts do allow for the delivery of physical platinum
Investors choose to trade on a futures market for several reasons, including price transparency and deep liquidity
Futures exchanges can be fully electronic, operating in real time and able to execute millions of trades per second
They can also provide secure clearing services, giving investors further peace of mind regarding settlement and mitigating counterparty risk
Platinum mining stocks and shares
Exposure to platinum can also be achieved by investing in platinum mining stocks and shares. This gives investors the ability to invest in companies that produce platinum group metals rather than investing in the physical metal itself.