PPLT Offers Lower Volatility Than SLV but Remains Smaller

Both the iShares Silver Trust (NYSEMKT:SLV) and the Abrdn Platinum ETF Trust (NYSEMKT:PPLT) give investors simple exposure to physical metals—silver and platinum, respectively—without the need to handle the commodities directly. This comparison highlights their differences in cost, risk, performance, and scale to help investors understand which may better complement a portfolio seeking precious metals exposure.

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.

SLV is slightly more affordable with a 0.50% expense ratio compared to PPLT's 0.60%; this difference could matter to cost-conscious investors, especially over long holding periods.

Performance & risk comparison

What's inside

PPLT tracks the spot price of physical platinum, aiming to provide a cost-effective and straightforward way to gain platinum exposure. While sector breakdown and top holdings are not reported, the fund has a long track record at 16.0 years and has grown to $2.0 billion in assets under management, offering investors direct access to platinum's price movements.

SLV, on the other hand, reflects the price of physical silver and is structured as a trust rather than a traditional exchange-traded fund. It is considerably larger, with $41.0 billion in assets under management, and also does not disclose a sector breakdown or individual holdings, focusing purely on silver price performance.

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

What this means for investors

The dramatic rise in the price of silver in recent weeks has attracted new attention to the precious metals market. One that often gets ignored is platinum, a metal rarer than gold, and is in demand for industrial uses.

Fortunately, PPLT allows investors to invest in this precious metal without having to own the physical substance. As the prices of funds such as the SPDR Gold Shares have risen, investors turned to SLV.

Now with silver prices spiking amid heightened macroeconomic concerns, the next focus of investors could shift to platinum.

Moreover, the smaller size and lower liquidity of PPLT makes it one precious metal ETF that could play into the hands of its investors. When demand suddenly increases for a low liquidity investment, prices can spike quickly. Additionally, platinum sells at a much lower price than gold despite being rarer.

That condition could add to the volatility as more investors scramble to move funds to investments tied to the precious metal market.

Glossary

ETF (Exchange-traded fund): A fund trading on an exchange, holding a basket of assets like stocks or commodities.
Trust (ETF trust structure): A legal structure holding assets, such as physical metal, on behalf of fund shareholders.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund's average assets.
Assets under management (AUM): The total market value of all assets a fund or manager oversees.
Beta: A measure of an investment's volatility compared with a benchmark index, often the S&P 500.
Max drawdown: The largest peak-to-trough decline in an investment's value over a specific period.
Total return: Investment performance including price changes plus any income, assuming all payouts are reinvested.
Volatility: The degree to which an investment's price moves up and down over time.
Spot price: The current market price for immediate settlement of a commodity or security.
Physical metals exposure: Investment that tracks the price of actual, stored metals rather than mining companies or derivatives.
Issuer: The financial institution that creates, manages, and markets an ETF or similar investment product.
Benchmark index: A standard, such as the S&P 500, used to compare an investment's performance or risk.

Will Healy has positions in SPDR Gold Shares. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.