Stoyanov Alexander GPF Global Palladium Fund

ETC research: European pensions funds are looking to go overweight in palladium

GPF : Almost half of European pension funds surveyed are looking to go overweight to palladium.

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Alexander Stoyanov, Chief Executive Officer of GPF

Palladium is the most expensive of the world’s most important precious metals – gold, silver, platinum, and palladium, due to its rarity and the difficulty mining it. Its price has surged over the past five years, rising from $500 per ounce to around $2,700 per oz (Bloomberg). Thanks to a production deficit and tighter emissions standards in Europe and China, demand for the metal, which is used in catalytic converters to scrub exhaust emissions from gasoline-powered vehicles and in exhausts of the hybrid electric vehicles is set to increase.

New research (1) with 150 European pension funds with a combined AUM of $213 billion, reveals that institutional investors are positive about the outlook for palladium as demand for catalytic converters increases, with 55% expecting the price to reach between $2801 and $3000 per oz in the third quarter of 2021, with a further 18% expecting it to range between $3,001 and $3,200 per oz. Only 23% expect the price to remain in a range of between $2601 – $2,800 per oz.

The study, which was carried out by Global Palladium Fund (GPF), the provider of industrial and precious metal Exchange Traded Commodities, shows that 43% of pension funds are expecting to increase their allocation to palladium over the next 12 months, compared to 15% who expect to underweight the metal.

Alexander Stoyanov, Chief Executive Officer of GPF said: “Palladium is now the most expensive of the precious metals thanks to its scarcity and attractive physical and chemical properties. In its key role in reducing ever-tightening vehicle emissions, palladium offers an exciting opportunity to invest in a cleaner and better environment.”

The Global Palladium Fund (GPF), established by MMC Norilsk Nickel, the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper, has launched six physically-backed metal ETCs this year – copper, nickel, silver, gold, platinum and palladium, with listings on LSE, Deutsche Börse, Borsa Italiana and SIX.

Targeting family offices, wealth managers, institutional and other similar professional investors, the ETCs track the spot price of the metals and have some of the lowest charges on the market, with total expense ratios (TER) ranging from 0.145% to 0.20%.

The metals backing the ETCs are sourced from producers and metal suppliers which have confirmed their compliance with the Sustainable Development Goals of the UN 2030 Agenda and other global initiatives in sustainable development and responsible mining. GPF is the only major ETC issuer to make such a pledge.

To strengthen ETC investor security, GPF uses IBM’s Hyperledger Blockchain in the custody chain of the metal. This is in addition to the traditional processes used by the custodian, enhancing the transparency and accountability of the issuer. By recording bar and cathode information on the blockchain, it provides clear ownership and an immutable custody chain for investors using the ETCs.

(1) Research conducted by Pureprofile with 150 pension funds across the UK, Italy and Germany. The survey was conducted online in April 2021.

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