Sprott Physical Platinum and Palladium Trust, which offers exposure to physical platinum and palladium, has underperformed a diversified precious metal pack by over 3x in H1-26. Despite concerns around bearish momentum and SPPP's lack of yield, I am prepared to turn cautiously optimistic. HEV (hybrid electric vehicle) sales volumes are on the up and support future PGM demand, as these vehicles require higher platinum and palladium loadings for catalytic converters.
The Sprott Physical Platinum and Palladium Trust offers direct PGM exposure but faces high management fees and geopolitical-driven price volatility. I prefer exposure through miners like Valterra, which offer operational value-add, dividends, and compounding potential versus SPPP's static physical holdings. PGM demand is heavily tied to catalytic converters; market surplus risk looms as EV adoption and geopolitical effects on rates and leveraged overall car purchases persist.
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