Platinum as an investment has similar purposes as gold and silver but prices for platinum are more influenced by industrial supply and demand than by speculation. Unlike gold and silver, there are significant industrial uses for platinum. Therefore the price of platinum as an asset and of platinum mining stocks can move differently than other precious metals.
For example, some investors may buy gold during poor economic conditions for speculative reasons but sell platinum because of the potential for declining industrial demand. Some investors prefer to buy precious metals, such as gold, silver, platinum and copper, in the physical form of bullion coins. Others prefer to buy shares of mining company stocks or mutual funds, ETFs and ETNs.
Platinum Investing With Mutual Funds, ETFs & ETNs
Most mutual funds do not hold platinum as a physical asset. Investors can get indirect exposure to platinum in mutual funds by holding equity precious metals funds, such as Vanguard Precious Metals & Mining (VGPMX) and USAA Precious Metals & Minerals (USAGX) but these will typically have more exposure to gold and gold mining companies than platinum and platinum mining companies.
If you want the most direct exposure to platinum, you will use a type of Exchange Traded Note (ETN), such as UBS E-TRACS Long Platinum Total Return ETN (PTM). It is important to note that ETNs are debt instruments, like bonds, that do not invest in any asset. Although linked to the performance of a market benchmark, ETNs are not equities or index funds; they combine the qualities of bonds and Exchange Traded Funds (ETFs).
Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.