Palladium ETF

PALL - ETFS Physical Palladium is the first physical palladium etf and began trading on January 8, 2010.  It is sponsored by ETF Securities LTD like their other ETF products (SIVR, SGOL, PPLT) PALL is backed by Physical Palladium stored by custodians on behalf of the trust.

The objective of PALL as written on the ETFS web site: "PALL is designed to offer investors a simple, cost-efficient and secure way to access the precious metals market. PALL is intended to provide investors with a return equivalent to movements in the palladium spot price less fees.

The Annual Expense Ratio for PALL is .60% (60 basis points)

As of October 4, 2010 the $2,842,500 and the average daily trading volume was 137,865 shares which is more than adequate liquidity for trading or investing.

Since Palladium is historically an industrial metal with close ties to the automotive industry it suffered a tremendous selloff during the the credit crunch and recession of 2008-2009. In 2010 however Palladium and thus (PALL) has out performed Platinum, Gold and Silver by a wide margin which might explain the almost immediate success of this palladium etf.

It's also worth noting that even though there has been strong periods of out-performance you can clearly see that Palladium has much higher volatility than Gold exhibited by periods of under-performance.

PALL Performance Since Inception VS Gold ETF (GLD)

Chart begins on the first trading date of PALL - 1/8/2010

As you can see despite the fact that Gold has captured most of the headlines in 2010 it's performance actually pales in comparison to the Palladium ETF - PALL.  In fact, the only other metal that has been as hot as palladium is the silver market.

Now let's compare it's performance to it's brother Platinum represented here by the Platinum ETF - PPLT

PALL Performance Since Inception VS PPLT Platinum ETF

Chart begins on first trading date of PPLT and PALL 1/08/2010

As you can see from this chart the Palladium ETF has dramatically out-performed the Platinum ETF PPLT by an even wider margin over the past year.

Since Silver is a metal that has BOTH Investor and Industrial demand lets also look at the performance of PALL as it relates to the Silver ETF SLV.

PALL Performance Since Inception VS SLV Silver ETF

Chart begins on the first trading date of PALL - 1/8/2010

As you can see there has been a strong correlation between the price of Palladium and the price of Silver but Palladium has had superior price performance with a higher degree of volatility.

Conclusion

The Palladium ETF - PALL does a good job of tracking the price movement of the highly volatile palladium market. The annual expense ratio is in line with other metals based etf products and the average daily volume provides good liquidity for both traders and investors.

But Beware!  Palladium can be more volatile than Gold, Silver and even Platinum.