New Precious Metal ETF Planned

Written By Luke Burgess

Posted February 10, 2010

ETF Securities USA has filed for permission to launch a brand-new U.S.-based ETF backed by a basket of physical gold, silver, platinum, and palladium.

The company said it planned to register 18 million shares with a proposed maximum aggregate offering price of $1.058 billion.

The filing stated, “The investment objective of the trust is for the shares to reflect the performance of the prices of physical gold, silver, platinum and palladium, in the proportions held by the trust, less the trust’s expenses.”

ETF Securities noted that, since the fund will take metals off the market, it could cause bullion prices to rise — especially for the relatively small markets for platinum and palladium, where supply and demand constraints exist that are generally not present for gold and silver.

“Purchasing activity associated with acquiring the bullion required for deposit into the trust in connection with the creation of baskets may temporarily increase the market price of gold, silver, platinum and palladium, which will result in higher prices for the shares,” the filing said.

If approved, the ETFS Physical PM Basket Shares would join the company’s four other U.S. physically backed precious metals ETFs. These include ETFS Physical Swiss Gold Shares (NYSE: SGOL), ETFS Physical Silver Shares (NYSE: SIVR), ETFS Physical Platinum Shares (NYSE: PPLT), and ETFS Physical Palladium Shares (NYSE:PALL).

Good Investing,

Luke Burgess
Investment Director, Hard Money Millionaire

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