Last Updated: 14 September 2023
Exchange traded product provider Boost ETP has launched Europe’s first palladium short and leveraged products as part of nine newly listed commodity ETPs on the London Stock Exchange.
The palladium ETPs will be 1x short and 2x leveraged. They will be launched at the same time as seven other gold, silver and natural gas products, which will include additional leverages (-2x and 2x, and also -1x for gold) to add to the existing suite of ETCs tracking gold, silver and natural gas already on offer.
Palladium, which is used as both a precious metal and an industrial metal, sees 67 percent of its world supply used in the automobile sector for catalytic convertors and has seen its price fall by 6.4 percent this year. This is in contrast to other industrial metals copper and aluminium, which are both down 14 percent, this year to date and silver at 35 percent.
William Rhind, managing director of ETF Securities said in a recent interview with HardAssetsInvestor.com that “the fundamentals [for platinum and palladium] are strong. We’re in a structural supply deficit for both metals currently, and based on current consensus, that’s expected to continue for the rest of this year.”
Boost ETP also reported that since 2008 palladium has risen 80 percent, while other industrial metals, copper and aluminium, have fallen by 2 percent and 25 percent, respectively.
Data gathered by Boost ETP suggests that the number of light vehicle cars is expected to grow by 23 percent to exceed 100 million by 2017. This is teamed with concerns over depleted stock levels in Russia, labour disputes with mine workers in South Africa and an industry under pressure to consolidate as production costs exceed palladium spot price have translated into a global palladium supply shortfall of 6 percent, according to Boost ETP’s note.
The new ETPs will offer investors short and leveraged exposures to daily changes in the indices from the NASDAQ Commodity Index Family. This means that (for example), if palladium rises by 1 percent on a particular day, the Boost Palladium 2x Leverage Daily ETP (2PAL) ) will rise by 2 percent and Boost Palladium 1x Short Daily ETP (1PAS) will fall by 1 percent.
Global assets in short and leveraged ETPs is currently at $51 billion, according to Boost ETP.