From the December 2010 issue of Research Magazine • Subscribe!

Metals Basket Debuts

Want to own precious metals but aren’t sure which ones?

A new exchange-traded product called the ETFS Physical Precious Metal Basket Shares (GLTR) removes some of the guesswork. GLTR owns physical gold, silver, platinum and palladium in fixed equal weights. Each metal represents a 25 percent position within the basket.

Because GLTR does not own futures contracts, it’s a better reflection of the spot price for the metals basket. It also avoids some of the operational issues associated with futures based ETFs and ETNs such as backwardation and contango.

The new product will join the firm’s other physically backed commodities products like silver (SIVR), gold (SGOL), platinum (PPLT) and palladium (PALL).

Each share of GLTR represents at inception 0.03 ounces of gold, 1.1 ounces of silver 0.004 ounces of platinum, and 0.006 ounces of palladium. The physical bullion is held in vaults by the custodian, JP Morgan Chase Bank and conforms to the London Bullion Market Association’s (LBMA) along with the London Platinum and Palladium Market Association’s (LPPM) rules for good delivery. The gold and silver allocations are held in London while the platinum and palladium will be held in London or Zurich.
GLTR’s annual expense ratio is 0.60 percent.

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