Absa Capital’s NewGold exchange traded fund (ETF), announced today that the amount of gold held by the fund exceeded 30 tonnes for the first time ever, recording yet another first for the country’s largest ETF. In March this year, NewGold became the first, and to date only ETF, to be Shari’ah compliant.
NewGold’s market capitalisation has swelled by R776m over the past two months driven by investor demand and the increase in the gold price. Currently the market capitalisation of NewGold is just over R7,1bn.
The NewGold ETF, is the only commodity based ETF in the local market, investing directly in gold bullion.
The buoyant demand for the ETF (from May 22 to date) has required that Absa Capital create 8,400,000 new debentures. This translates into having to hold a further 2.55 tonnes of gold, increasing the assets held by Absa Capital to 30.16 tonnes of gold or 969,782 ounces.
Commenting on today’s announcement, Dr Vladimir Nedeljkovic, Head of ETFs and Index Products at Absa Capital said: “Since inception in 2004, NewGold has performed extraordinarily well, compelling us to increasing the gold holdings and the assets under management manifold.”
“With the gold price at elevated levels investors are certainly favouring direct investment in gold, as it is less volatile and better performing than gold shares,” said Nedeljkovic.
Note to the editor:
About New Gold
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
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.