A substantial influx of interest from institutional investors and wealth management allocations has pushed the Global Palladium fund (GPF), an exchange-traded fund created by Russia’s Norilsk Nickel, above $100 million in assets under management (AUM) for the first time.
The Zug, Switzerland-based fund has achieved a record $109 million in AUM, driven in part by strong demand for investments linked to the green energy transition and electric vehicle adoption, the fund said in a press release.
The GPF has seen solid flows into its unique Physical Copper, Physical Nickel and Physical Carbon Neutral Nickel products, as well as its Physical Gold ETC (exchange-traded commodity), which is Europe’s least expensive, with a 0.12% management fee.
“Investor appetite for targeted, real-asset exposure to the low-carbon economy transition has jumped massively in the last 12 to 18 months, and with that, we’ve seen steadily increasing interest in the key metals underpinning the technology and infrastructure vital to making the world’s greener future a reality,” said the fund’s CEO, Alex Stoyanov.
The GPF reports it has seen strong interest in its Physical Copper ETC. Like its nickel products, it is the only physically backed exchange-traded commodities for both metals available to investors today.
Allocations have grown as investors increasingly value a hard-asset approach to investing in metals. These ETCs offer better tracking and lower total cost of ownership, compared to synthetic alternatives.
The institutional-only Carbon Neutral Nickel ETC has also proved popular. Launched earlier this year, the product is backed by metal mined using majority renewable energy and paired with internally generated carbon credits to achieve a neutral carbon footprint.
The fund’s business development head, Timothy Harvey, said most companies that could benefit from the green transition exhibited significant correlation to the broader equity market, and as such, didn’t offer pure or reliable exposure to the megatrend.
“Investors are starting to look much more closely at metals in this context, and we are seeing a rapid evolution in terms of the sophistication with which they are approaching the asset class, particularly when it comes to understanding the importance of physical metal products compared to synthetic alternatives.”
The palladium price has been trending lower in recent weeks.
Click here for an interactive chart of palladium prices