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ETF providers are banking on demand for commodity ETFs increasing in the coming year. With global economies booming, we've already seen an increased need for oil and gas. Metals demand, especially in emerging markets, has helped to push the prices of platinum, gold and silver higher.
Platinum ETF: The success of gold ETFs and silver ETFs has brought interest to the idea of platinum ETF. The market for platinum is smaller and less liquid than the precious metals and sourcing physical stocks to underpin them would be difficult.
Gold ETF: With the dollar in decline, gold ETFs are looking, well, like a golden investment opportunity. Gold is generally considered a safe, solid and sturdy investment whenever the dollar's value decreases.
The strong push to invest in gold comes from the supply and demand of it. This case is especially true in India and China where demand for gold has been climbing.
Silver ETF: Exchange traded funds (ETFs) investing in silver have continued to support the price of the metal. Now might be the time to look at silver as a viable investment option. Demand for silver is rising for use in jewelry, silverware and industrial applications. Silver is rare, with only 23 silver mines operating around the world. And the silver stockpiles are at a 50-year low. Silver not only rises with gold during a bull market, lately it outperforms it.
One of the advantages of gold ETF investments and other precious metals ETFs is that they are a strong hedge against inflation.
The following are few Precious Metals ETFs:
- PowerShares DB Base Metals Fund (DBB): The PowerShares DB Base Metals Fund is based on the Deutsche Bank Liquid Commodity Index - Optimum Yield Industrial Metals Excess Return and managed by DB Commodity Services LLC. The Index is a rules-based index composed of futures contracts on some of the most liquid and widely used base metals - aluminum, zinc and copper (grade A). The index is intended to reflect the performance of the industrial metals sector.
- streetTRACKS Gold Shares ETF (GLD): The objective of the Trust is for the Shares to reflect the performance of the price of gold bullion, less the Trust's expenses.
- iShares Silver Trust ETF (SLV): The objective of the iShares Silver Trust is for the value of the shares of the iShares Silver Trust to reflect, at any given time, the price of silver owned by the iShares Silver Trust at that time, less the iShares Silver Trust's expenses and liabilities.
- PowerShares DB Silver Fund (DBS): The PowerShares DB Silver Fund is based on the Deutsche Bank Liquid Commodity Index - Optimum Yield Silver Excess Return and managed by DB Commodity Services LLC. The Index is a rules-based index composed of futures contracts on silver and is intended to reflect the performance of silver.
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