Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
The case for a diversified precious metals allocation
While gold has long been regarded as the “safe haven” asset during times of fear and peak volatility, the investment team at ETF Securities has highlighted a group of investment assets that share similar qualities to that of gold, allowing the same safe-haven status.
The three other precious metals sharing similar characteristics are silver, platinum, and palladium. They have all traded higher, since the Ukraine crisis spread fear and volatility through markets earlier this year. ETF Securities head of distribution Kanish Chugh says: “All four precious metals have traded at high levels over the past couple of years, but all are subject to periods of volatility. An option for investors is to smooth that volatility by investing in a basket of physical precious metals.”
Chugh says the individual prices of each precious metal are driven by their individual appeal and role as an industrial metal. Each has its own unique supply/demand characteristics that drives its price. For example:
- The price of silver is driven by battery and solar panel demand.
- the platinum price is driven by demand for its use across various industries, such as glass moulds, hydrogen electrolysers, and fuel cells.
- palladium is used in car catalysts, chemical applications, dentistry and other medical applications.
The ETF Securities’ Physical Precious Metals Basket ETF (ASX Code: ETPMPM) contains all four precious metals in a single portfolio backed by physical allocated metal held by JPMorgan Bank. The allocation is currently 50.5% gold, 25.4% palladium, 17.7% silver and 6.4% platinum.
Chugh says, “The gold price has eased back after hitting a peak of US$2,043 an ounce early in March and is currently finding support around US$1,840 an ounce. Despite this decline, gold is still trading in a range it established in 2020, which well above the level of previous years. Platinum and palladium also peaked in March this year, but silver hit another peak in mid-April.”
With silver hitting another peak in April, gold, platinum and palladium are taking a little break having pulled back from the highs hit earlier in the year. All in all, the ETFS Physical Precious Metals Basket ETF is up 4.3 percent over the six months to the end of April and is up on average 8.5% a year over the past three years.
