3 Best Palladium ETFs: How To Invest in Palladium in 2022

Palladium prices are soaring due to the sanctions imposed on Russia, the world’s second-largest palladium producer, for its war in Ukraine. But palladium has also benefited from tighter environmental regulations in Europe and China. Learn how you can invest in the metal.

Anna Ng   Updated March 7th, 2022

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Why invest in palladium?

Russia produces nearly 40% of the world’s palladium, a silvery-white metal mostly used in car exhausts. It is mined as a by-product of nickel and platinum, mainly in South Africa and Russia. According to the U.S. Geological Survey, Russia produced 74,000 kilograms of palladium in 2021, making it the world’s second-largest producer after South Africa. (Russia was number one in 2020.) Russia’s Norilsk Nickel is the world’s largest palladium producer.

Palladium is transported by passenger planes, but the Russian airspace has been closed since the war began. Besides, palladium prices have been rising even before Russia’s invasion of Ukraine.

Palladium prices soared in 2022

Palladium prices rose almost 50% year-to-date to $3,000 an ounce in early March 2022. Palladium funds like PALL are having a good year as a result.

What is palladium used for?

Palladium is primarily used in catalytic converters – also known as auto-catalysts – that reduce toxic emissions from cars and trucks. Auto-catalysts on exhausts account for around 80%-85% of palladium demand. Palladium is also found in jewelry, semiconductors, and some chemicals.

Although carmakers could try to substitute palladium for platinum, Russia is also a major producer of platinum, and switching is expensive and difficult.

Palladium prices have benefited from tighter emissions regulations

Growing car sales, particularly in markets like China, and tighter emission regulations in Europe and China helped palladium prices over the years. Most importantly, China has cracked down on car pollution, forcing carmakers to buy more palladium.

In Europe, the switch from diesel cars, which use platinum, to gasoline-powered cars, which need palladium, has also been a boon. Demand for diesel cars plummeted after the Volkswagen emissions scandal. (In 2015, Volkswagen admitted that it made up emissions test data for its diesel-powered cars.)

However, the longer-term future of palladium is less certain. Palladium is used in hybrid cars like Toyota’s Prius, but electric vehicles don’t produce toxic emissions or need catalytic converters.

Because the road to 100% electrification is bumpy, investing in palladium may still be a good idea for now.

What is the best way of investing in palladium?

The easiest way to invest in palladium is through an exchange-traded fund. There are three funds that invest in physical palladium, though only one of them, PALL, is 100% in palladium. The other two funds add metals like gold, silver, or platinum to the mix.

Palladium ETF list

There are several funds that invest in palladium:

  • Aberdeen Standard Physical Palladium Shares ETF (PALL)
  • Sprott Physical Platinum and Palladium Trust (SPPP)
  • Aberdeen Standard Physical Precious Metals Basket Shares ETF (GLTR)

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The best palladium ETFs

Learn more about each fund.

Fund / TickerExpense RatioAssets ($m)2022 PerformanceHoldingsPalladium %
Aberdeen Standard Physical Palladium Shares ETF (PALL)0.60%53066%Palladium100%
Sprott Physical Platinum and Palladium Trust (SPPP)1.01%19850%Palladium, platinum64%
Aberdeen Standard Physical Precious Metals Basket Shares ETF (GLTR)0.60%1,10017%Gold, silver, palladium, platinum<15%

Aberdeen Standard Physical Palladium Shares ETF (PALL)

  • Expense ratio: 0.60%
  • Palladium exposure: 100%

The PALL fund lets you invest in physical palladium stored in a J.P. Morgan Chase vault in London, UK. PALL buys palladium bars; their list is posted daily on the Aberdeen website. The vault is inspected twice a year by a third-party auditor.

The fund has returned nearly 15% annually since its launch in December 2009. It costs 0.60% and has $530 million in assets under management.

Sprott Physical Platinum and Palladium Trust (SPPP)

  • Expense ratio: 1.01%
  • Palladium exposure: 64%

The Sprott Physical Platinum and Palladium Trust is smaller and more expensive than PALL. SPPP invests in physical platinum and palladium. Bullion is held at the Royal Canadian Mint.

As of January 31, 2022, 64% of the fund was in palladium and 36% in platinum. Shareholders can redeem their units in the trust for physical platinum and palladium, subject to minimum redemption requirements.

SPPP has returned around 5% a year since its inception in December 2012. It has about $200 million in assets under management and costs 1.01% annually.

Aberdeen Standard Physical Precious Metals Basket Shares ETF (GLTR)

  • Expense ratio: 0.60%
  • Palladium exposure: <15%

The GLTR ETF from Aberdeen invests in physical gold, silver, platinum, and palladium. Precious metal bars are stored in vaults in London, the United Kingdom, and Zurich, Switzerland, and are inspected twice a year by an auditor. However, palladium is the fund’s number three metal after gold and silver, representing less than 15% of the fund. So GLTR is a better way of investing in precious metals generally.

GLTR has over $1 billion in assets and costs 0.60%. The fund returned 28% annually since its launch in October 2010.

💰 Which palladium ETF is best?

  • PALL is the best way of investing in palladium. SPPP adds platinum, and GLTR adds gold, silver, and platinum to the mix. Compared to SPPP, which costs 1.01%, PALL is also relatively cheap.
  • However, the market for palladium is small and illiquid. Prices have been extremely volatile, rising to over $3,000 in May 2021, then crashing when carmakers reduced production due to chip shortages. So we would proceed with caution.

🔔 Looking to invest in palladium mining stocks? Here is a list of palladium mining companies.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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Frequently Asked Questions

Is there a palladium ETF?

There are three ETFs that invest in palladium bars. They include PALL, SPPP, and GLTR. But out of the three, only PALL is 100% invested in palladium. Other ETFs add metals like gold, silver, and platinum to the asset mix.