World's only platinum fund set to soar with explorers The world's only platinum fund, Switzerland's Bushveld Fund, is promoting junior miners and explorationists in the PGM sector because Bushveld believes they will deliver high returns.
Author: Tessa Kruger Posted: Friday , 09 Mar 2007
JOHANNESBURG (Mineweb.com) - The world's only platinum fund, The Bushveld Fund - a Swiss public mutual fund managed by Best Asset-- is promoting juniors and explorers in the Platinum Group Metals sector in South Africa and the African continent as it believes they are set to deliver high returns.
Fund manager Bernard Loriol told Mineweb that the fund with a current value of R600 million or CHG 96.47 million (US$78.2 million) is expected to improve 50% this year on last year's performance of 96.8% in Rands and 65.7% in CHF, as corporate activity continues in the platinum sector this year. The fund delivered returns of 19.4% in South African Rands and 11.6% in CHF by the end of February.
"The interest in PGM explorers is soaring. As Lonmin and Impala took over Afplats and Afriore - there are only 13 listed explorers operating in South Africa left," according to Loriol.
"The $3 billion market capitalization of these firms resembles a trout in an aquarium full of hungry sharks, including the Japanese, Chinese, Russians, US Mutual Funds, Hedge Funds, Indians and Pension Funds."
Officially named the BAC Mining Regions Managed Vol. - South Africa Fund, Bushveld is investing in the PGM sector as it believes it has stronger fundamentals than gold. The fund performed eight times better than the average gold fund over the last 12 months.
"PGM explorers as a basket are currently trading at an average of $14 per ounce,- 1/6 the price of their gold sisters," Loriol said. "We believe that in the long term we should at least reach parity with gold - if the PGM basket price does not reach twice the price of gold."
"PGM equities are also very cheap, especially when one compares it to gold."
Loriol said PGMs were supported by three major investment considerations of the current and next decade: development in China, energy, and climate change that has brought about the need for autocatalysts.
The Bushveld Fund, previously called the Rand Fund, moved from investing in gold to platinum at the end of 2005. The fund's top holdings include Eland Platinum (13.3%), Ridge Mining (7.1%), Wesizwe Platinum (9.1%) and Platinum Group Metals (7.9%).
BAC will aim to boost the fund and junior companies with a Platinum Day event held in Switzerland next week where stakeholders will meet executives representing 80% of the fund's assets.
The event will mainly focus on climate change and how it affects demand for PGMs.
