Checking In: A Nice Day For A WITE Wedding
By ETF Professor | April 27, 2011 7:04 AM EST
You may have heard that silver is kind of a big deal these days. Indeed, the white metal that can attribute half of its demand to industrial uses is the toast of the precious metals party, regardless of what reason one attaches to that fact: Strong industrial demand or silver's status as a safe-haven in the face of wilting fiat currencies.
What the reasons are, when it comes to silver ETFs, the world seems to begin and end with the iShares Silver Trust (NYSE: SLV), by far the largest of the plain vanilla long silver funds. Of course, there are other ETFs that gotten plenty of time in the silver spotlight, such as the Global X Silver Miners ETF (NYSE: SIL), but SLV is the dominate silver ETF.
So even with silver's rise, it is possible for a long silver ETF to be somewhat anonymous and that's just what today's “Checking In” candidate has been, at least when considering how popular silver is these days. Let's try to change that with a closer examination of the ETFS Physical White Metals Basket Shares (NYSE: WITE).
Like the ETFS Physical Precious Metals Basket Shares (NYSE: GLTR) introduced before it, WITE offers combination precious metals exposure through physical holdings. In WITE's case, that means silver, platinum and palladium with an expense ratio of 0.6%
The ETF holds nearly 50,000 ounces of silver, but just about 500 ounces of platinum and 400 ounces of palladium, according to the ETF Securities Web site. Consider WITE a silver cocktail with a twist of platinum and a dash of palladium as it allocates 55% of its weight to silver, 33% in platinum and 12% in palladium.
That might be why WITE is far from the first ETF off the tongues of silver bulls. It isn't a pure play on silver, but the metals mix is actually what makes WITE attractive. WITE is obviously levered to economic growth as all three of its metals have multiple industrial uses, which arguably makes the ETF just as, if not, attractive than GLTR.
WITE trades less than 30,000 shares a day and has just over $70 million in assets under management, but those stats shouldn't be deterrents. This what's important: WITE is up 30% year-to-date and if silver pulls back, WITE becomes an interesting “buy on the dip” candidate.
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