abrdn Physical Palladium Shares ETF (PALL)

Overview of Aberdeen Physical Palladium Shares ETF (PALL)

Profile:

PALL is an exchange-traded fund (ETF) that tracks the price of palladium. It seeks to provide investment results that, before expenses, generally correspond to the performance of the Bloomberg Palladium Subindex. This means the ETF invests in physical palladium bullion held by HSBC Bank USA, N.A..

Objective:

The primary investment goal of PALL is to offer investors a convenient and cost-effective way to gain exposure to the palladium market. It allows investors to participate in the potential price movements of palladium without the need to directly purchase and store the physical commodity.

Issuer:

Aberdeen Standard Investments (abrdn) is the issuer of PALL.

• Reputation and Reliability: abrdn is a reputable asset management firm with a long and successful history. It manages over $538.4 billion in assets globally (as of September 30, 2023) and offers a wide range of investment products and services.
• Management: PALL is managed by a team of experienced professionals with expertise in precious metals investing.

Market Share:

PALL is one of the largest and most popular palladium ETFs. It currently has approximately 41% market share of the total assets in physically-backed palladium ETPs (as of August 31, 2023).

Total Net Assets:

PALL has approximately $2.2 billion in total net assets (as of October 26, 2023).

Moat:

PALL's competitive advantages include:

• Low expense ratio: It has an expense ratio of 0.60%, making it one of the most affordable palladium ETFs available.
• Physical backing: PALL is backed by physical palladium bullion, providing investors with direct exposure to the underlying commodity.
• Liquidity: PALL is a highly liquid ETF with an average daily trading volume of over 4 million shares.

Financial Performance:

PALL has historically delivered strong returns, closely tracking the price of palladium.

• Year-to-date return (YTD): 3.22% (as of October 26, 2023)
• 1-year return: 10.10% (as of October 26, 2023)
• 3-year return: 92.53% (as of October 26, 2023)
• 5-year return: 241.35% (as of October 26, 2023)

Note: Past performance is not a guarantee of future results.

Benchmark Comparison:

PALL has outperformed the Bloomberg Palladium Subindex, its benchmark, over the past 1, 3, and 5 years.

Growth Trajectory:

The demand for palladium is expected to remain strong in the coming years, driven by its use in catalytic converters for gasoline vehicles and its growing applications in the electronics and chemical industries. This bodes well for the future growth prospects of PALL.

Liquidity:

• Average Daily Trading Volume: Over 4 million shares (as of October 26, 2023)
• Bid-Ask Spread: Tight bid-ask spread, indicating high liquidity

Market Dynamics:

The palladium market is influenced by various factors, including:

• Global economic growth: Strong economic growth typically leads to increased demand for palladium.
• Supply and demand dynamics: Supply disruptions or unexpected demand surges can significantly impact palladium prices.
• Government regulations: Environmental regulations can influence the demand for palladium used in catalytic converters.

Competitors:

PALL's main competitors include:

• ETFS Physical Palladium (PPLT): Market share: 25%
• GraniteShares Palladium Trust (PALL): Market share: 3%
• Xtrackers Physical Palladium ETC (PALL L): Market share: 4%

Expense Ratio:

PALL has a total expense ratio of 0.60%.

Investment Approach and Strategy:

• Strategy: PALL passively tracks the Bloomberg Palladium Subindex.
• Composition: PALL primarily invests in physical palladium bullion held in trust by HSBC Bank USA, N.A..

Key Points:

• Invests in physical palladium bullion
• Low expense ratio of 0.60%
• Highly liquid
• Strong historical returns
• Growth potential driven by increasing demand for palladium

Risks:

• Price volatility: The price of palladium can fluctuate significantly, impacting the value of PALL.
• Commodity risk: PALL is subject to risks associated with the palladium market, such as supply disruptions and changes in demand.
• Counterparty risk: PALL relies on HSBC Bank USA, N.A. to hold and safeguard the physical palladium.

Who Should Consider Investing:

PALL is suitable for investors seeking:

• Exposure to the palladium market
• Diversification benefits
• Long-term growth potential

Fundamental Rating Based on AI: 8.5

PALL receives a high score based on an AI-powered analysis considering its financial health, market position, and future prospects. The ETF demonstrates strong performance, competitive fees, and high liquidity, making it an attractive option for investors interested in palladium exposure. However, investors should be aware of the inherent volatility associated with commodity investments.

Resources and Disclaimers:

This analysis was compiled using data from the following sources:

• abrdn: https://www.abrdn.com/investor/products/etfs/palladium-trust-etf-(pall)-gbs
• Bloomberg: https://www.bloomberg.com/quote/PALL:US
• Morningstar: https://www.morningstar.com/etfs/arcx/pall/quote

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Before making any investment decisions, it's essential to conduct thorough research and consider your individual investment goals and risk tolerance.