South African investment bank Absa Capital has received regulatory approval for its planned Johannesburg-listed palladium exchange-traded fund and plans to launch the product by the end of the year.
The fund will be backed exclusively by palladium sourced in South Africa, said Absa’s head of investments, Vladimir Nedeljkovic, told Reuters.
"We have regulatory approval, and we’re now basically just finalizing a couple of small things," Nedeljkovic added.
"It’s primarily going to be an institutional product. There are several asset managers, large institutional investors in South Africa that are potentially interested," Nedeljkovic added.
Nedeljkovic also added that he did not expect the fund to struggle to find metal within South Africa to back the new ETF, saying South African investors’ particular affinity with platinum meant the new fund would probably grow more slowly than NewPlat, an ETF operated by Absa.
"In principle it’s more complicated, just because of the fact that only 30% of global palladium supply is South African, rather than 80%as it is for platinum," he said.