invest platinum guide
Investing & Retirement

How to Invest in Platinum

August 30, 2023 - Dan Urner

There are a number of different ways to invest in platinum. Get informed about the most important platinum investment solutions in this moneyland.ch guide.

Useful and very rare: These features make platinum an interesting option for precious metal investors, alongside gold and silver. You do not necessarily need to buy physical platinum. Here, moneyland.ch explains the most relevant solutions for investing in platinum.

1. Platinum bullion

Physical platinum in the form of bars and coins is available at many Swiss precious metal dealers and some Swiss banks. It is important to compare the prices charged by different dealers. Buying platinum bullion has one major disadvantage compared to buying gold bullion: purchases are subject to the Swiss value-added tax (VAT). Holding physical platinum does not yield dividends or interest. On the other hand, you are the actual owner of your platinum, and are not exposed to any issuer risk.

Table 1: Prices for one-ounce platinum bars across select dealers

Dealer Price Markup over spot price
Platinum spot price in CHF CHF 817.01  
Basler Kantonalbank CHF 945.61 15.74%
Geiger Edelmetalle CHF 1002.10 22.65%
Philoro CHF 1030.37 26.11%
Pro Aurum CHF 1039.84 27.27%
Degussa CHF 1045.77 28%

 

All prices include the VAT. The prices shown were recorded on August 23, 2023. The spot price shown is the LBMA closing price on August 22, 2023. The USD to CHF exchange rate on August 22, 2023 was used for the spot price currency conversion.

You should account for ongoing storage costs. Platinum bullion can be stored in a safe at home, in a safe deposit box from a secure storage company, a bank safe deposit box, or a bonded warehouse. An advantage of keeping platinum in a bonded warehouse is that you do not pay VAT. However, the ongoing storage fees can end up costing more than VAT over long terms.

2. Precious metal accounts

You can also invest in platinum using a platinum-denominated bank account. Many Swiss banks offer these precious metal accounts. Investing this way has the advantage that you do not need to worry about storage. You can normally make withdrawals from your account in the form of physical platinum bars. The disadvantage is that you pay account fees. You can compare these fees using the precious metal account comparison on moneyland.ch. You can find useful information in the guide to Swiss precious metal accounts.

3. Platinum ETFs

Passively-managed investment funds are another option. There are exchange-traded funds (ETFs) that replicate the platinum price. All you need in order to buy shares in an ETF is a custody account at a conventional bank or a brokerage account from an online trading platform (the latter is normally cheaper). You can compare brokerage costs using the Swiss stock broker comparison on moneyland.ch.

ETFs themselves also generate costs (the total expense ratio or TER) that have to be accounted for. The table below lists platinum ETFs that are: denominated in Swiss francs; domiciled in Switzerland; backed by physical platinum; and let you withdraw your platinum in the form of standardized bullion bars with an approximate weight of five kilos. Note: Currently, the cost of five kilos of platinum is more than 150,000 US dollars, so withdrawing platinum from funds is not realistic for small investors.

Table 2: Swiss platinum ETFs denominated by CHF and backed by physical platinum

Exchange-traded fund ISIN TER 5-year
performance
10-year
performance
Currency
hedging
Platinum spot price in CHF     -0.81% -38.89%  
ZKB Platinum ETF CH0183136057 0.50% -4.05% -42.09% No
Swisscanto ETF Precious Metal
Physical Platinum (CHF)
CH0106406280 0.56% -6.65% -52.86% Yes

 

ETF performance figures are based on prices from the first trading days in August 2013, August 2018, and August 2023. The spot price is based on the LBMA closing prices on the same dates.

4. Platinum ETCs

Exchange-traded commodities (ETCs) have similar advantages to ETFs. They too can be traded conveniently and simply using a brokerage account, with no need to handle physical platinum. But in contrast to ETFs, ETCs are only debt claims against their issuer. That exposes you to issuer risk, because if an ETC’s issuer becomes insolvent, your ETCs will not be counted as segregated assets. Before you buy an ETC, check whether it is baked by physical assets.

Table 3: Selection of platinum ETCs that are backed by physical assets

ETC certificate ISIN TER 5-year
performance (CHF)
10-year
performance (CHF)
Platinum spot price in CHF     -0.81% -39.68%
Invesco Physical Platinum ETC IE00B40QP990 0.19% -1.35%  
WisdomTree Physical Platinum ETC JE00B1VS2W53 0.49% -2.20% -42.73%
Xtrackers Physical Platinum EUR
Hedged ETC
DE000A1EK0H1 0.75% -19.94% -62.12%

 

ETC performance figures are based on the closing prices of the first trading days in August 2013, August 2018, and August 2023. The platinum spot price is based on the LBMA closing price on the same dates.

5. Platinum futures

Platinum futures are used to bet on the future value of platinum. Two parties create a contract for the sale of platinum by one party to the other party at a specific date in the future. As the buyer, you profit if the price of platinum goes up between the time you sign the contract and the date when you become the owner of the platinum. As the seller, you profit if the platinum price falls during that time. In most cases, only the ownership of the platinum changes, without the platinum itself actually being delivered.

In order to enter into a futures contract, you have to put down a deposit as collateral to create a margin. Normally, the collateral must be equal to a certain percentage of the amount being transacted in the contract. The resulting leverage effect makes it possible to achieve high returns with relatively small capital investments, but the potential losses are just as large. New investors should avoid futures in favor of less risky investment solutions.

6. Stocks of companies in the platinum industry

You can also invest in platinum indirectly by buying shares in companies that mine or deal in platinum. This can be done using a brokerage account. Examples of companies in the platinum sector include Anglo American (United Kingdom) and Impala Platinum Holdings (South Africa).

But buying shares in individual companies is not suitable for long-term investing. While it is possible to achieve substantial returns and also receive shareholder dividends over shorter terms, hinging your investment on specific companies exposes you to a lot of risk. The platinum price is particularly volatile, and resultingly, the values of companies in this sector are also volatile. Additionally, there is no guarantee that a specific company in the platinum industry will gain value just because the price of platinum goes up.

7. Stock ETFs

Stock ETFs are less problematic than individual stocks because their investment capital is spread across the stocks of numerous companies in the platinum sector. So buying shares in a stock ETF exposes you to less risk, while still enabling you to receive dividends. But you should be aware that ETFs that invest specifically in the platinum industry sector are only marginally diversified. While they do invest in many different companies, all of these companies are in the same sector. You should also be aware that most of the companies in which these funds invest also mine or deal in other commodities and precious metals, and not just platinum.

More on this topic:
How to invest in silver
Tips for buying silver in Switzerland
Tips for buying gold in Switzerland
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Editor Dan Urner
Dan Urner is editor at moneyland.ch.
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