The fund uses the LBMA palladium price as its benchmark and holds most of the trust's assets in allocated physical palladium. Independent external audits regularly verify the physical metal stored in vaults, which supports transparency.

It suits commodity investors who want to bet on rising palladium prices, which are closely tied to automotive demand, or who want to diversify their portfolios.

It is a passively managed (index-tracking) ETF launched by abrdn in 2010.

The fund aims to replicate the palladium spot price, less operating costs. It buys the metal physically and stores it securely, so it focuses on the value of the physical metal without the price distortions that arise in futures-based products.

• Fully backed by physical assets
• Spot price exposure with no roll-over costs

Assets under management (AUM) stand at $520.2M, and the expense ratio is 0.60% per year.

Like GLD and SLV shown in the table, it invests in physical precious metals. However, palladium derives a much larger share of its demand from industrial uses such as automotive catalysts than from jewelry, which makes it more sensitive to the economic cycle.

Continued demand driven by tighter vehicle emissions regulations and supply chain instability have been the main variables for the price. However, concerns that the faster shift to electric vehicles will reduce demand from internal combustion engines can also weigh on the long-term price trend.

Investment demand for palladium, which is highly scarce even among precious metals, remains steady. Because the metal serves both industrial purposes and as an investment asset, fund inflows tend to fluctuate considerably as the macroeconomic environment changes.

Investors can enjoy the effect of directly owning physical palladium, but should be mindful of the heavy reliance on industrial demand and the high market volatility.

GLD, IAU, and SLV, which appear in the table, are leading products that invest in gold and silver, while PALL has stronger industrial characteristics than these. If you want broader exposure to platinum group metals, PPLT or PLTM can be alternatives, and SPPP, which holds both platinum and palladium, is also worth considering.

Investing in physical palladium carries risk factors entirely different from those of ordinary stocks or bonds, so you should carefully review the following points before making an investment decision.

Palladium has limited trading volume and a very high dependence on specific industries, so in a sharp downturn, liquidity shortages can lead to larger losses than expected.

It is a physically backed investment vehicle suited to aggressive investors who are focused on the growth potential of the industrial precious metals market. Given its high volatility, it is advisable to use it as a supplementary asset in a portfolio.