Absa’s top-performing ETF Fund is presenting financial opportunities in platinum.
Absa Bank Ltd.’s New Gold Platinum ETF emerges as a prime investment choice, attracting significant capital to South Africa amid rising demand in automotive, industrial, and hydrogen sectors.
Driving Capital to South Africa
South African bank, Absa’s Platinum ETF fund registers a notable surge with 761 million rand (USD 40 million) of fund inflows this month. This growth is attributed to its unique proposition allowing direct investments in platinum traded on the spot market.
Launched in 2013 by Absa’s Corporate and Investment Banking division, the ETF stands out by allowing direct investments in platinum traded on the spot market. Despite global challenges, including a commodities slowdown and decreased demand from China, the fund “experienced significant inflows, reversing all outflows experienced in 2022 within the first quarter of 2023,” said Michael Mgwaba, head of exchange-traded products at Absa CIB. “The investment case for platinum has been stronger” this year, he said.
A jump in production
A 16.9% jump in the production of platinum-related metals in October resulted in a 3.9% increase in output by the South African mining industry compared with the prior-year period, data from the country’s statistics office showed this week. The growth in mining output followed a 1.9% contraction in September.
Contributing to economic growth
Robust demand in automotive and industrial sectors, coupled with growing interest in the hydrogen economy, has contributed to temporary platinum shortages, boosting prices and reinforcing the value of Absa’s Platinum ETF. As South Africa’s fund inflows this year rank second lowest among ten emerging market nations, Absa’s ETF remains resilient, attracting investor interest in Botswana and Namibia as well, where the fund has secondary listings, according to Mgwaba.
Beyond its role as a valuable investment, “platinum is a hard asset that investors could consider during times of increased market risk,” said Mgwaba, positioning Absa’s Platinum ETF as an appealing option for investors seeking both stability and returns.
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