How the ETPMPM ETF could be used in portfolios
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 our FUM target
The Global X 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 Global X, 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’s fees & costs explained
Global X 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.
Bottom line
This is just a quick overview of the ETPMPM ETF. Before ‘testing the depth of the water with both feet’ so to speak, be sure to read the ETPMPM ETF’s Product Disclosure Statement (PDS), available on the Global X website, or speak to your financial adviser. For another handy resource, take a look at our Global X ETPMPM report. You can also use our complete list of ASX ETFs to search for a few different ETFs in the sector and conduct a side-by-side comparison using everything you’ve learned here.
