Absa’s NewGold has achieved a Year-to Date (YTD) growth of 36% and presents a great investment opportunity compared to other listed securities on the Ghana Stock Exchange (GSE).
The NewGold Exchange Traded Fund (ETF), which was relaunched last year by Barclays Bank Ghana (a member of the Absa Group), has rallied on the back of the rise in global gold prices (touching around $1,500 per ounce) for the first time in over six (6) years. It has proven to be one of the best performing assets for both long term and tactical investors particularly during these times of global economic uncertainty.
Highlights from the graph below show that over the last 18 months, NewGold has gone from approximately GHS56.51 to GHS77.01 per security. This represents a return of over 36%. In contrast, the Ghana Stock Exchange Composite Index (GGSECI) has gone from GHS2, 579.72 to GHS2, 173.98 resulting in a decrease of 18.66%
NewGold was initially launched in 2004, by Absa in South Africa. At the time of its launch, it was the third commodity Exchange Traded fund (ETF) in the world and until recently, the only commodity ETF listed on the Johannesburg Stock Exchange (JSE). It has secondary listings on stock exchanges in Botswana, Nigeria, Mauritius, Namibia and here, in Ghana.
NewGold was listed on the Ghana Stock Exchange by Absa in August, 2012 as NewGold (GLD) and is the only ETF listed on the GSE offering institutional and retail investors the opportunity to invest in the commodities market. It offers an investment vehicle which tracks the spot price of gold and is fully-backed by physical gold with each debenture equivalent to approximately 1/100th of gold bullion, which is held with a secure depository on behalf of investors.
The sterling performance this year is expected to continue as global risk drivers persist. Key amongst these are the US-China trade war, easing monetary policy regime, geo-political risks with the imposition of sanctions on Russia and Iran, Brexit and Hong Kong’s social unrest.
While investors in Ghana continue to be fixated on government securities and chasing high yields in other investments, it is worthy to note that NewGold presents a commendable approach to protfolio diversification and offers a great investment opportunity to sophisticated retail investors, Asset and Pension Funds managers among others.
NewGold is marketed by Barclays Bank in Ghana and can be acquired through a licensed stockbroker on the Ghana stock Exchange or IC Securities Ltd – the local market maker.