IAU vs. PPLT: Gold or Platinum in a Record-Breaking Rally?

The iShares Gold Trust (NYSEMKT:IAU) and abrdn Physical Platinum Shares ETF (NYSEMKT:PPLT) differ sharply in cost, assets under management, and recent returns, with IAU offering lower expenses and greater scale, while PPLT has outperformed over the last year and shown milder historical drawdowns.

Both IAU and PPLT provide streamlined access to physical precious metals, but they target different markets—gold and platinum, respectively. This comparison looks at cost, performance, risk, and portfolio makeup to help investors decide which exposure may align better with their objectives.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

IAU looks more affordable with a 0.25% expense ratio compared to PPLT’s 0.60%, a difference that could matter for long-term holders, especially given IAU’s much larger assets under management (AUM).

Performance & risk comparison

What's inside

PPLT is designed for investors seeking exposure to platinum, offering a straightforward way to invest in this precious metal without the complications of futures contracts or mining stocks. The fund does not report a sector breakdown or top holdings, as it tracks physical platinum, and has been operating for 16 years. Its structure and focus may appeal to those looking for diversification outside gold, with no reported quirks or leverage.

IAU, in contrast, provides exposure to physical gold. While sector details list "Real Estate 100%," this appears to be a reporting artifact—like PPLT, IAU is a single-asset trust holding physical metal rather than a diversified equity portfolio. Neither fund discloses traditional equity holdings, so investors are essentially choosing between two different metals rather than baskets of companies.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

Both of these ETFs rode 2025's extraordinary precious metals rally, driven by Federal Reserve rate cuts, inflation concerns, and massive central bank gold purchases. Platinum added another catalyst: severe supply shortages from South Africa combined with rising industrial demand from hydrogen fuel cells.

IAU holds physical gold bars in secure vaults, tracking gold's spot price minus its 0.25% expense ratio. With around $70 billion in assets, it's one of the largest gold ETFs available. Gold delivered approximately 70% returns over the past year while the S&P 500 gained roughly 25%.

PPLT stores platinum in London vaults at 0.60% annually -- more than double IAU's fee. However, platinum's 151% one-year return has crushed gold's performance, fueled by supply deficits and surging Chinese investment demand.

For investors who value stability, IAU offers lower-cost gold exposure with deeper liquidity and a centuries-long track record as a monetary asset. Gold's widespread acceptance by central banks worldwide provides stability that platinum lacks. Consider PPLT if you believe industrial demand and supply constraints will continue driving platinum higher, but understand you're taking on significantly more price volatility. Past performance doesn't guarantee these returns will continue -- platinum's dramatic surge makes it riskier at current levels than the steadier, more established gold market.

Glossary

ETF: Exchange-traded fund that trades on stock exchanges and typically tracks an index or asset.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund's average assets.
Assets under management (AUM): Total market value of all assets a fund or manager oversees for investors.
1-yr return: Percentage gain or loss an investment produced over the most recent 12-month period.
Total return: Investment performance including price changes plus any income, assuming all payouts are reinvested.
Max drawdown: Largest peak-to-trough decline in an investment's value over a specified time period.
Beta: Measure of an investment's volatility compared with a benchmark, often the S&P 500 index.
Physical precious metals ETF: Fund that holds bullion, like gold or platinum, rather than mining stocks or futures contracts.
Futures contracts: Agreements to buy or sell an asset at a set price on a future date.
Equity holdings: Ownership stakes in companies' stocks held within a fund's portfolio.
Sector breakdown: Classification of a fund's holdings by industry or economic sector to show portfolio concentration.
Leverage (in funds): Use of borrowed money or derivatives to amplify a fund's exposure and potential returns or losses.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.