With some recent SEC rule changes, a physically backed platinum and palladium ETF may soon be trading on the NYSE.  Traders believe the move clears the way for the ETFS Platinum and ETFS Palladium Trusts to begin trading sooner rather than later and that has sent prices of those metals higher with an anticipation of higher demand.

The funds would buy up platinum and palladium and put it in storage to back the ETF shares which seek to track the price of the metal.  It’s a nice way for investors to trade the price of the underlying metal without actually having to physically own the metal.

If you don’t want to wait for the metal backed platinum ETF, there are currently two ways to play platinum prices through ETN’s (that don’t physically hold the underlying metal). 

One way is through the iPath Platinum Trust (PGM)
The other is the E-Tracs Long Platinum ETN (PTM)

Both aren’t all that liquid and trade under 100K shares a day, but liquidity is improving and the spread and between the bid and ask isn’t all that significant.

Earlier this month, Schwab (SCHW) launched a few ETFs that will allow its clients to trade commission free, creating a nice diversified vehicle for dollar cost averaging.  The move may pressure other firms to offer commission free ETFs in the future, but so far it hasn’t happened.

Currently Schwab offers 4 ETFs and has plans to offer additional ETFs later this year.  They are:

Schwab US Broad Market ETF (SCHB)
Schwab US Large Cap ETF (SCHX)
Schwab US Small Cap ETF (SCHA)
Schwab International Equity ETF (SCHF)

I don’t expect the 4 ETF’s to gain much popularity outside of Schwab because they are generic and compete with more liquid and established ETF’s, but it looks like  they provide decent liquidity already with all of them trading an average of about 100K shares a day or more.  They plan to add large cap growth, large cap value, international small cap and and an emerging market ETF in a few weeks.  I think if they stick to more general ETF’s and don’t try to specialize too much, they’ll continue to do well with their ETFs.  It’s a smart move from Schwab and appears to be paying off already.