London - Holdings of Absa Capital's platinum-backed exchange-traded fund have risen above half a million ounces just 10 weeks after its launch, accounting for a quarter of all global platinum ETF reserves, the fund said on Friday.
Absa said as of the end of Thursday, its NewPlat ETF held 503,613 ounces of platinum, up 3.3 percent from the previous day.
Its inflows since last Friday now total nearly 76,000 ounces, worth around 1 billion rand ($99.96 million).
The fund, launched on April 26, has seen strong interest despite a relatively poor performance in the spot platinum price, which is down 13 percent this year, with investors opting for physical exposure to the metal rather than miners.
The metal has performed better in South African rand terms, rising 2.3 percent this year.
Analysts say South African investors are confident prices will climb further given months of labour unrest in the South African mining sector.
“This is indicative of the very healthy appetite for physical investment in platinum group metals that exists in South Africa,” Mitsubishi analyst Jonathan Butler said.
“For South African pensions funds and other investment funds, the attraction of holding the physical metal as opposed to holding a mining equity is high,” he said.
“This gives them some exposure to what's happening in the mining sector, but without some of the risks associated with the mining equities.”
South African mining companies have been shaken by unrest for the past 18 months, rooted in a turf war between two rival unions. More than 50 people were killed during clashes in 2012, while platinum mine output fell more than 15 percent.
The NewPlat ETF is now the second largest physical platinum ETF after New York-based ETFS Physical Platinum Shares, which is operated by the US arm of London's ETF Securities, and which holds 611,847 ounces of metal.
That product took two years to hit the half a million ounce mark.
Holdings of platinum-backed ETFs now stand at 1.95 million ounces worldwide.
ETFs, which issue securities backed by physical metal, have proved a popular way to gain exposure to precious metals in recent years. - Reuters