Global Palladium Fund (GPF), the specialist provider of physically-backed metal Exchange Traded Commodities (ETCs) announced today it has reached USD109 million in assets under management for the first time.
The firm writes that the growth in assets represents allocations from both institutional investors and the wealth management space, and is driven in part by strong demand for investments linked to the green energy transition and electric vehicle adoption.
GPF has seen particularly strong flows into its unique Physical Copper, Physical Nickel and Physical Carbon Neutral Nickel products, as well as its Physical Gold ETC which is Europe’s cheapest with a 0.12 per cent management fee.
“Investor appetite for targeted, real-asset exposure to the low-carbon economy transition has jumped massively in the last 12-18 months, and with that we’ve seen steadily increasing interest in the key metals underpinning the technology and infrastructure vital to making the world’s greener future a reality,” explains Alex Stoyanov, Global Palladium Fund CEO.
As well as benefiting from wider global construction and development trends, copper is used extensively in green energy applications, and demand is expected to grow significantly as a result. Similarly, nickel, a key material in electric vehicle batteries, is attracting interest from investors that expect more consumers to adopt lower-carbon solutions in their daily lives.
GPF has seen particularly strong interest in its Physical Copper ETC which, like its Nickel products, are the only physically-backed ETCs for both metals available to investors today. Allocations have grown as investors increasingly value a hard-asset approach to investing in metals, with these ETCs offering better tracking and lower total cost of ownership compared to synthetic alternatives.
The institutional-only Carbon Neutral Nickel ETC has also proved very popular, the firm says. Launched earlier this year, the product is backed by metal mined using majority renewable energy and paired with internally-generated carbon credits to achieve a neutral carbon footprint.
“While there are lots of exciting companies that may stand to benefit from the green transition, most of them exhibit significant correlation to the wider equity market, and as such don’t really offer very pure or reliable exposure to this mega trend,” explains Timothy Harvey, head of Business Development at Global Palladium Fund.
“Investors are starting to look much more closely at metals in this context, and we are seeing a rapid evolution in terms of the sophistication with which they are approaching the asset class, particularly when it comes to understanding the importance of physical metal products compared to synthetic alternatives.”