ASX Weekly ETF Gainers Include Carbon, Silver and Platinum

Exchange Traded Funds (ETFs) on the ASX with exposure to commodities continued their surge but were outpaced by two surprising ETF gainers for the week.

The palladium price has risen 24.5% since its nadir in December 2023 to A$1,747 an ounce, lifting the spirits of investors in this ETF holding physical palladium, which took fifth place.

The price of platinum shook off some of its lethargy over the past year, lifting 4.6% since March to A$1,555 an ounce, boosting an ETF that holds physical platinum into fourth place.

An ETF that invests in physical holdings of silver came in third place was no surprise as spot silver traded near a 20-year high at A$44.60 an ounce.

Synthetic Carbon ETFs

A synthetic ETF does not invest in assets directly but provides exposure to hard-to-access assets through futures contracts.

A tiny ETF with a small number of assets under management that provides investors with exposure to the price of carbon as reflected in futures markets took second place.

The biggest weekly gainer was a global carbon ETF with $984.1 million under management that also provides exposure to the price of carbon as driven by the world’s biggest and most developed emission trading schemes.

It uses carbon futures, derivatives whose values are connected to carbon emissions allowances, such as the European Union’s Emissions Trading Scheme (ETS) or the Western Climate Initiative.

These futures are deliverable, meaning that on expiry the holder takes ownership of the carbon allowances that their futures are connected to.

Carbon futures are traded on regulated exchanges, mostly by utility companies and financial institutions.

Carbon ETFs are also used by these institutions to provide a hedge to manage the impact of carbon emissions on an investment portfolio.

ASX Weekly ETF Gainers

 

Global X Global Carbon ETF (Synthetic) (ASX: GCO2) + 11.1%
VanEck Global Carbon Credits ETF (Synthetic) (ASX: XCO2) + 10.8%
Global X Physical Silver (ASX: ETPMAG) + 10.1%
Global X Physical Platinum (ASX: ETPMPT) + 9.9%
Global X Physical Palladium (ASX: ETPMPD) + 8.9%

Risk Profile

An investment in a synthetic asset carries significant risks including market risk, concentration risk, futures strategy risk, cap and trade risk, counterparty risk, currency risk, political, regulatory, and tax risks, fund operations, and tracking an index.

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