Absa Capital’s NewGold Exchange Traded Fund (ETF), has today become South Africa’s largest ETF with assets over R5.1bn, overtaking Satrix40 with assets of R4.76bn.
Vladimir Nedeljkovic, head of ETF’s and index products at Absa Capital, said that with the listing today of an additional 4.4 million debentures (equivalent to 1.35 tones of gold bullion), NewGold Exchange Traded Fund has exceeded ZAR5.1bn in assets under management.
NewGold was designed to track the price of gold and create an investment tool to allow institutional and retail investors to invest in a liquid, listed instrument that is fully backed by gold bullion. NewGold ETF, the only commodity ETF in the local market, was launched in November 2004 with assets under management of just under R250m . Satrix 40, tracking the performance of the FTSE/JSE Top 40 Index, was listed in December 2000, with the assets under management of R2.6bn
Says Nedeljkovic: “Since inception, NewGold has performed extraordinarily well, increasing the gold holdings and the assets under management manifold. 2007 and the beginning of the years were particularly strong.”
“Since the beginning of 2007, the gold holdings increased two and a half times from 10.25 tones at the beginning of 2007 to 25.93 tones after today’s additional listing. During the same period, the assets under management increased three and a half times, from R1.46bn to R5.1bn.”
Nedeljkovic said that with the gold price at an all time high, he expected a lot of investor interest in gold this year.
“Investors are certainly favouring direct investment in gold as it is less volatile and better performing than the investment in gold shares.”
The NewGold ETF invests directly in gold. The Satrix40 ETF invests in the JSE’s Top 40 shares in proportion to their market capitalisation.
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About Absa Capital
Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.