Swiss pension funds have bought 20% of the Best Asset Class (BAC) Platinum Fund, marketed as the world’s only platinum fund, as junior platinum stocks are undervalued and demand for the green metal is set to grow.
Best Asset Class (BAC) fund manager Bernard Loriol said that Swiss Pension Funds now had a 20% asset holding in the Bushveld platinum fund invested in junior platinum companies in the South African Bushveld complex compared to a zero holding three months ago. He said pension funds were likely to increase holdings in the fund when it established a 3 year track record towards the end of the year. Sophisticated Swiss pension funds that had already invested in the fund sought the returns commodities offered and were disappointed with the performance of some indexes, according to Loriol.
Andre Ludin of the Novartis Pension Fund in Switzerland said liquidity could be an issue if one made a large investment in the Bushveld Fund, but the “small” platinum companies offered good value as only 6 to 10% of their reserves were included in their net asset values (NAVs). This compared to the NAVs of major platinum producers, which accounted for about 80% of company reserves. “The small companies will finally perform better,” Ludin said.
He said investors had a choice between investing in Exchange Traded Funds or the platinum metal, big companies such as Anglo Platinum and Lonmin that are expensive for newcomers and small companies or the Bushveld fund that spreads the risk over a number of juniors and are currently undervalued. He said the company has invested in platinum as it believes it is an investment in the future. Demand will come from autocatalysts, energy battery sales and issues such as pollution in China that will have to be addressed.