For investors seeking momentum, ETF Securities Physical Palladium Shares (PALL - Free Report) is probably on radar now. The fund just hit a 52-week high, which is up roughly 61.2% from its 52-week low price of $45.05/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
PALL in Focus
The fund reflects the performance of the price of palladium. PALL charges investors 60 basis points a year in fees. This product is also a popular choice for palladium investing with an AUM of $195.8 million. It exchanges about 34,000 shares a day (see all Precious Metals ETFs).
Why the Move?
The majority of palladium is used in the automotive industry for manufacturing catalytic converters to clean exhaust emissions. There is a new found optimism in the sector post U.S. elections. President-elect Donald Trump plans to introduce a burst of stimulus with tax cuts and infrastructure spending package. Speculation is rife that business investments will a get a new lifeline now. Moreover, supply shortages are expected to continue into next year. Thus, the global supply outlook appears fragile at the current level, making the metal an intriguing option for investors.
More Gains Ahead?
Currently, PALL has a Zacks ETF Rank #3 (Hold) with a High risk outlook. So it is hard to get a handle on its future returns one way or another. However, the fund has a positive weighted alpha of 40.60. A positive weighted alpha hints at more gains.
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