Sprott Asset Management is preparing to launch a $115 million physically backed platinum and palladium ETF.
Sprott Inc, the investment company run by high-profile precious metal bull Eric Sprott, will launch a physically backed exchange-traded fund worth US$115 million (RM359.95 million) that will invest in physical platinum and palladium, according to a filing.
Aimed at retail and institutional investors, the fund will make it easier to get exposure to the spot price of the precious metals, which have surged in value in the last decade, without the inconvenience and cost of taking delivery and storing them.
The fund, similar but not the same as those run by ETF Securities, will invest in the long term, rather than speculating on short-term price changes, the trust said in a preliminary prospectus to the US Securities and Exchange Commission yesterday.
The removal of more physical metal from the market may help to boost prices further, market participants said. Many analysts attribute the rise in prices over the past two years in part to the rise in popularity of physically backed ETFs.
“It may drive investor demand. It’s basically the hoarding of platinum. If they’re going to be buying and storing platinum it will take industrial supply off the market,” said Sean McGillivray, head of asset allocation at Great Pacific Wealth Management in Oregon.
The prospectus warned that purchases may affect prices, but the trust’s initial US$115 million purchase would be a fraction of global output based on current prices.