In the wake of surging gold and silver prices, Bank of America has highlighted four exchange-traded funds (ETFs) that offer attractive exposure to precious metals.
What Happened: The top-ranked ETFs by BoFA include abrdn Physical Silver Shares ETF SIVR, iShares Silver Trust SLV, Invesco DB Precious Metals Fund DBP, and abrdn Physical Precious Metals Basket Shares ETF GLTR, CNBC reported on Sunday. These ETFs, rated as “more attractive” by Bank of America, encapsulate a range of precious metals such as silver, gold, palladium, and platinum.
Bank of America’s research suggests that a portfolio with 40% exposure to broad commodities would have outpaced a similar portfolio with U.S. Treasury bonds by 0.8% annually since 1945. Despite strong performance post-Covid-19, long-term commodity returns remain near record lows, as per the bank. However, Bank of America anticipates a reversion to the mean for commodities.
Jared Woodard, the bank’s ETF strategist, stated, “Commodities are still at all-time lows relative to financial assets, and this ratio would likely move higher in a sustained shift to a 5% world.”
The abrdn Physical Silver Shares ETF SIVR is the most cost-effective silver fund in Bank of America’s coverage, with a total expense ratio of 0.50%. The bank’s commodity team is also bullish on silver, predicting spot prices to hit $26.46 per ounce by the end of 2024, and $32.50 per ounce by the end of the next year.
Why It Matters: The spotlight on these ETFs comes at a time when investors are increasingly turning to precious metals. Investors were looking at gold miners as spot gold prices stalled.
This trend was followed by a breakout in silver, gold, and copper prices. This shift was particularly notable for companies like Newmont NEM, which are integral to the precious metals supply chain.
Image by Inozemtsev Konstantin via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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