More than $60 billion is invested in various exchange-traded funds (ETFs) focused on precious metals, although much of that is invested in gold and silver. One of the lesser-known options for precious metals investors is palladium. Palladium is a silvery metal chemically similar to platinum. It's used primarily in catalytic converters in cars, but it also has applications in jewelry, dentistry and electronics. Palladium and other platinum group metals such as rhodium and ruthenium are somewhat rare, keeping prices on these metals relatively high.

The United States is a relatively minor producer of palladium, generating an estimated 12,500 kilograms of the precious metal in 2015. Russia stood as the biggest producer with 80,000 kilograms, while South Africa comes in a close second at 73,000 kilograms. The price of palladium has historically been fairly volatile. In 2001, its price peaked at nearly $1,100 per ounce before plummeting to less than $200 per ounce just two years later. As of July 4, 2016, palladium sat at $607.75 per ounce. Investors who are interested in adding palladium exposure to their portfolios might find the easiest path is through ETFs.

ETFS Physical Palladium Shares

The menu of ETF options for investing in palladium is relatively limited, but the ETFS Physical Palladium Shares ETF (NYSEARCA: PALL) is the largest, with assets of around $166 million as of July 1, 2016. The fund's administrator, ETF Securities, launched this fund in 2010 and currently manages several other commodity-based ETFs.

This fund may be the purest play on palladium given that its price is based directly on the price of physical palladium according to the London Platinum and Palladium Market (LPPM). The fund has performed relatively well in 2016, responding to the general flight to quality that has seen investors moving out of riskier assets and into traditional safe havens such as precious metals and Treasuries. The fund was up more than 7% year to date (YTD) as of July 1, 2016, and up nearly 35% since the fund's inception. The Palladium Shares ETF charges an annual expense ratio of 0.6%.

Sprott Physical Platinum & Palladium Trust

The Sprott Physical Platinum & Palladium Trust (NYSEARCA: SPPP) operates in a substantially similar manner to the ETFS Physical Palladium Shares ETF in that it invests in physical platinum and palladium bullion. While the fund had an allocation of roughly 56% palladium and 44% platinum as of July 1, 2016, it aims to maintain an approximate 50-50 allocation to the two metals.

This fund is organized as a closed-end trust. The fund is invested in a set number of ounces of both platinum and palladium, and shares are traded just like any other stock or ETF. Unit holders of this trust also have the ability to redeem their units once a month to take physical delivery of bullion bars if certain redemption minimums are met. The fund has nearly $103 million in total assets and charges an annual expense ratio of 0.5%.

ETFS Physical Precious Metals Basket Shares

The ETFS Physical Precious Metals Basket Shares (NYSEARCA: GLTR) invests in a broad array of precious metals, although palladium is a relatively small portion of the portfolio. As of July 1, 2016, the fund had 58% of fund assets invested in gold, 31% in silver, 6% in platinum and just 5% in palladium.

This fund is managed by the same company that administers the Physical Palladium Shares fund and operates in a substantially similar manner. The fund invests in physical bullion of each of the metals and stores them in a secure London facility. The fund has more than $213 million in assets under management (AUM) and charges an annual expense ratio of 0.6%.