Absa Capital’s NewGold ETF (NewGold) is the simplest and most cost-efficient method for investors to invest directly in physical gold bullion. NewGold continuously tracks the gold price and enables investors to invest in a listed instrument (structured as a debenture) in which each security is equivalent to approximately 1/100 ounces of real gold held in a secured stockpile of gold bullion.
NewGold ETF debentures are listed on the JSE (JSE Limited) and are easily obtained through a JSE member stockbroker or the NewGold Investment Plan administered by Absa Investment Management Services (AIMS).
Although only launched in 2004 the NewGold ETF has grown rapidly due to its attractive returns and recently passed Satrix 40 to become the biggest ETF listed on the JSE.
NewGold is the first and still the only product in South Africa through which institutional and retail investors can securely invest directly in gold bullion, with the added benefit of minimal administrative fees.
When listed on the Exchange Traded Fund Sector of the JSE in November 2004, NewGold was only the third commodity ETF in the world (first two in Australia and the UK) and to date remains the only commodity ETF on the JSE.
Certified Shari’ah Compliant
The NewGold ETF is a non-interest based product investing directly in gold bullion.
In March 2008 the Shari’ah Supervisory Board, made up of specialised jurists in Shari’ah Islamic Law, issued a ruling stating that the NewGold ETF complies with Shari’ah. As such it is in line with Islamic principles of ethical investing.
The issuing company, NewGold Issuer Pty (Ltd), was incorporated for the sole purpose of issuing securities backed by gold bullion and is not involved in any activities that are not permitted under Shari’ah Law.
NewGold opens the way for Muslim investors to gain exposure to gold through investing in a listed ETF.
Benefits of investing in NewGold securities
- Research shows that gold securities should constitute between 5% and 10% of an optimal investment portfolio
- Historically gold has always retained value. Over the long term gold has delivered inflation-beating returns
- Over the years investment in actual gold has proven to be relatively low-risk and notably less volatile than the returns on gold equities
- Gold is an excellent South African Rand hedge as well as a hedge against US Dollar depreciation
- Gold is a proven safe haven investment in unsettled times
- Investing and withdrawing funds is straightforward
- Investment values can be determined at any time.