What is the ETPMPD ETF used for?
The ETFS ETPMPM ETF provides investors with access to the precious metal of palladium, by seeking to achieve a return equivalent to the movements in the palladium spot price, before fees and expenses. Palladium comes from the same family of metals as platinum and is used in many electronic and industrial products, particularly in the automotive industry.
ETPMPD could be used by investors to diversify a portfolio with the precious metal commodity of palladium, which is typically uncorrelated with other asset classes. In this way, ETPMPD could be used as a hedge against risk. It could also be used by investors to profit from a view that palladium prices will rise in the future.
Keep an eye on FUM
The Global X ETPMPD ETF had $8.23 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.
Fees and costs for investors
Global X charges investors a yearly management fee of 0.49% for the ETPMPD ETF. This means that if you invested $2,000 in ETPMPD for a full year, you could expect to pay management fees of around $9.80.
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.
Summary
These are just some of the considerations or factors you would need to look at when weighing up the ETPMPD ETF. Before doing anything, take a look at our Global X ETPMPD report – it’s free. While you’re at it, don’t forget to search our complete list of ASX ETFs.
