HILTON TARRANT: Following on from its wildly successful NewGold ETF, which is by far the largest exchange-traded fund by market capitalisation in South Africa, Absa has listed the NewPlat ETF.
Vladimir Nedeljkovic, head of investments at Absa’s Corporate & Investment Banking Division, joins us now. Vladimir, already a couple of different exchange-traded notes in the market which do offer exposure to platinum. How’s the NewPlat ETF different from those?
VLADIMIR NEDELJKOVIC: Hi. There are a couple of ways that the NewPlat differs from the ETNs on the market. First of all, it is fully physically backed, basically in the same way as NewGold. Every debenture in issue is fully backed by 100th of an ounce of platinum bullion that we hold as the custodian.
Secondly, this product is treated as a domestic investment. So all the ETNs for institutions…foreign products – and of course they all take part of their offshore allowance. This investment is treated as domestic. And also because it’s not issued by a bank, it is an ETF, it is not going to impact the bank clients or the bank limits for the investors.
HILTON TARRANT: In terms of inflows so far this has been listed for just on four days.
VLADIMIR NEDELJKOVIC: That’s correct. So after four days of trading we are actually at the moment sitting basically at one half of the biggest platinum ETF globally. We have about six tons of platinum – that is R2.6bn in assets under management for the four days.
HILTON TARRANT: And in terms of inflows – have these been from institutional clients, retail clients, a mixture of both?
VLADIMIR NEDELJKOVIC: Ja. As you might imagine, these flows are predominantly coming from institutional investors. We have some inflows from retail. This is all institutional money. We of course do expect to get some retail inflows as time goes by.
HILTON TARRANT: And in terms of costs for investors? What is the annual fee, and how does that compare globally?
VLADIMIR NEDELJKOVIC: Yes, this product has, the same as NewGold, a management fee of 0.4% per annum. And this is basically one of the cheapest, if not the cheapest, fee for the platinum ETF globally. Globally costs are between 49 and 60 basis points, so this one is significantly cheaper.
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