* South African platinum ETF holdings top 579,000 oz
* Investors believe supply woes may lift metal prices
By Jan Harvey
LONDON, Aug 29 (Reuters) - New Gold Platinum, the physically backed South African platinum exchange-traded fund operated by Absa Capital, has become the largest fund of its type in volume terms just four months after its launch, Absa said on Thursday.
Holdings of the rand-denominated NewPlat ETF, as the fund is known, increased by nearly 12,000 ounces on Thursday to 579,198 ounces, Absa's head of investments Vladimir Nedeljkovic said.
That puts its platinum reserves above those of the next largest platinum exchange-traded product, New York's ETFS Physical Platinum, which holds 572,409 ounces of metal.
"We listed another 1.2 million debentures today, getting the fund size to 579,198 ounces of platinum," Nedeljkovic told Reuters on Thursday. "With today's creation, we did become the largest platinum fund in the world."
NewPlat added half a million ounces of metal in only 10 weeks after its launch on April 26, a level of reserves it took the New York fund two years to achieve.
Analysts say the fund has proved popular with investors seeking exposure to platinum without having to buy into troubled mining stocks, which are suffering from a toxic mix of rising costs, labour unrest and weak demand for their product.
"There are two things that can be bullish for platinum; one is if demand goes up, the other is if supply goes down," Macquarie analyst Matthew Turner said. "Only one of those things is bullish for the platinum equities, so in many scenarios one might expect the underlying commodity will do better."
The fund also appeals to South African buyers because it is denominated in rand. This enables them to invest in platinum, which is usually denominated in dollars, without having to eat into a 35 percent maximum allocation they can have in foreign assets.
Platinum prices, though little changed in dollar terms this year, have risen around 6.6 percent when denominated in rand. The metal is strongly outperforming gold , which has fallen more than 15 percent this year.