Absa's platinum-backed ETF tops rankings

This means that NewPlat has now officially overtaken the premier New York-listed platinum fund, ETS Physical, that since its inception in 2010 has, to date, been the largest platinum ETF in the world. NewPlat is currently only listed on the JSE though plans are underway to launch in multiple jurisdictions.

As of 29 August 2013, 58-million NewPlat debentures (shares) were sold to investors on the JSE, backed by more than 18 tons of physical platinum in Barclay's vault in London. This platinum cannot be lent out and is kept in the vault belonging to the NewGold Fund, under which Absa's platinum ETF is issued.

NewPlat's overwhelming success follows that of Absa's gold ETF, NewGold, launched in 2004. The two ETFs invest directly in gold and platinum, tracking the prices of both metals allowing institutional and retail investors to invest in liquid and listed instruments. Investors don't have to buy shares in platinum or gold mining companies in order to gain exposure to the two commodities. Instead, they can invest directly in gold bullion and physical platinum held in vaults in London. New Gold is listed on the JSE with secondary listings in Botswana, Nigeria, Ghana and Mauritius.

Positive outlook for platinum prices

"We are delighted with the performance of the platinum ETF, especially after being in the market for such a short time. NewPlat's performance confirms Absa as a leading international provider of ETFs, firstly in gold (NewGold) and now in platinum (NewPlat)," said Vladimir Nedeljkovic, head of investments at Absa's Corporate and Investment Banking division.

"Both funds have done extremely well. NewGold is the largest Gold ETF on the JSE and now, NewPlat, although only four months old, has become the largest platinum ETF not only on the JSE, but also the largest in the world. This entrenches Absa's position as global market leaders."

The outlook for platinum prices continues to be positive for 2013, driven by a supply deficit largely attributable to South African labour unrest. On the demand side, a rebound in the global vehicle manufacturing sector, a big consumer of platinum, indicates that demand for the metal will remain steady.

"Given these and other favourable market dynamics, the outlook for platinum-linked products is looking good. As such, this is a perfect time for investors to invest in the metal - and doing so through ETFs is made even more attractive because of the low bid spreads and minimal expense ratios," said Nedeljkovic.