Global Palladium brings four physically-backed metal ETCs to the LSE
Global Palladium Fund, founded in 2016 by Russian mining company Norilsk Nickel, has launched four physically backed metal ETCs on the LSE, with a focus on sustainability, TERs of between 0.145 per cent and 0.20 per cent, and a blockchain-based infrastructure.
Alexander Stoyanov (pictured), Chief Executive Officer of Global Palladium Fund, explains that the firm was originally founded to bring stability to the supply and demand for the industrial customers by the purchasing of precious metals on the market in order to reduce volatility and guarantee a steady supply for industrial end consumers
“We were successful with that and then the idea came that the world is changing and we saw that besides the industrial users and the miners, not everyone understands metals so we wanted to share that knowledge and provide the instruments and exposure to spot price as not many ETFs could do that,” Stoyanov says.
The new physically-backed gold, silver, platinum and palladium ETCs will track the spot price of the respective metals they cover. The firm writes that the ETCs have a strong focus on ESG, and LBMA-approved metal will be sourced from producers (including its founder Norilsk Nickel) and suppliers who support the Sustainable Development Goals of the UN 2030 Agenda and other global initiatives in sustainable development and responsible mining.
“We are targeting institutional investors, family offices and hedge funds. Investors who believe in metals as underlying assets and who could use the market to increase or hedge their exposures.”
Stoyanov says that it was important for the firm to have an ESG strategy. “I don’t believe that you could offer the investment community products where we can’t prove the provenance so we only work with well-known and reliable companies or suppliers to make sure that we could look straight into the eyes of the investors.”
The metals will be stored in the LBMA-approved vaults in London and Zurich. “The DLT (Distributed Ledger Technology) or blockchain (sometimes those words being used interchangeably) allows us to keep the records and ensure they are publicly available so everyone can see and it can be traced back to the initial production mine,” Stoyanov says. “The beauty of the DLT is not just ‘I am telling you this’ but provenance, responsible sourcing along with other elements of the commodity could be traced back and verified by independent entities.”