London- The NewGold Platinum exchange-traded fund launched by Absa Capital in late April already accounts for around 20 percent of total global platinum ETF holdings, data from the fund showed on Thursday.
As of end Wednesday the fund, known as NewPlat, held 375,802 ounces of platinum to back its securities, representing around one-fifth of all platinum held by ETFs, which stands at around 1.83 million ounces.
Those inflows have occurred since the fund was launched on April 26.
Since then platinum prices have outperformed other precious metals to hold steady at around $1,465 an ounce, while sector bellwether gold has fallen more than 5 percent.
Prices are expected to benefit this year from threats to South African supply, source of three out of four ounces of the world's platinum.
South African platinum output fell 16 percent last year as a wave of industrial action hit mining companies.
“The launch of this product gives domestic South African investors the opportunity to dissociate their view of the metal price from their view of the platinum equities,” Mitsui Precious Metals analyst David Jollie said.
“Given the cost pressures in South Africa and the political risks of operating in Zimbabwe currently, the outlook for the platinum mining equity prices seems to be more complex than the simpler bullish view of the prospects for the metal price.”
Precious metal-backed ETFs, whose securities give investors exposure to the underlying asset price without having to store and insure physical metal, have proved popular with investors in recent years as they seek out hard assets.
New York's ETFS Physical Platinum Shares, which is operated by a unit of London's ETF Securities, remains the largest single platinum-backed ETF, with holdings of 621,925 ounces of metal as of June 12.
Its holdings have also risen by more than 120,000 ounces this year, a further indication of the strength of investment interest in platinum.
“If we start seeing stronger reasons to think prices will go up, such as further mine disruption, you would have thought more people would buy into platinum ETFs,” Citigroup analyst David Wilson said.
“If there is an expectation that price (gains) are going to accelerate... I suspect you would see continued uptake not just of the South African ETF but across the board.” - Reuters