Palladium ETFs underperformed gold by a wide margin in 2011 but have held their own in recent months on an improved outlook for the global economy.

A potential shortfall in physical palladium supply has helped boost investment appetite for the physically backed palladium ETF. Meanwhile, fund providers are hoarding more of the precious metal.

ETFS Physical Palladium Shares (NYSEArca: PALL) is up 1.9% over the past month, even as other precious metals were showing negative returns.

In the first quarter, manager ETF Securities saw inflows into PALL and ETFS Physical Platinum Shares (NYSEArca: PPLT) that were seven times greater in ounces than its gold product, ETFS Physical Swiss Gold Shares (NYSEArca: SGOL), said manager director Will Rhind.