The Perfect ETF to Hold With Gold
Do you want exposure to precious metals that are outperforming gold this year? Need some diversity in your portfolio while holding a hedge against inflation?
There is an ETF for that.
The White Metal Basket ETF (WITE:NYSEArca) debuted in 2010 as interest in holding precious metals as a hedge against inflation and currency devaluation swelled. The fund allows investors to achieve exposure to silver, platinum, and palladium.
The concept is simple. This ETF charges investors .6% per year to holding bars of silver, palladium, and platinum in secure vaults in Europe. The trust uses the “Good Delivery” rules of the London Bullion Market Association and the London Platinum and Palladium Market.
The metals are inspected twice a year by an independent auditor to guarantee to investors that the holdings are present and in good condition.
The ETF is currently weighted towards silver. As of the last disclosure, WITE was 60% in silver, 29% in platinum, and 11% in palladium. The shifting weight guarantees the ETF can capture gains from any of the metals.
As a result, the ETF is boosting gains above anything you'd see from simply holding gold. Gold prices are up 11% this year, while the ETF is up 22%.
As you can see from the 50-day moving average moving upward through the 200-day moving average, WITE just formed a “golden cross.” The movement is a bullish indicator and could lead to strong resistance if the shares drop towards the 200-day moving average.
The White Metal Basket ETF certainly will not replace the importance of gold as an inflationary hedge in any portfolio, but it will provide diversity that is not easily found elsewhere.
If you're like many investors who are flooding into gold, you might want to consider this ETF as well.+9
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