South Africa’s largest Exchange Traded Fund (ETF), Absa Capital’s NewGold ETF (NewGold), on Friday reached yet another milestone.

NewGold, the only commodity ETF in the local market, announced that it had attracted in excess of R10bn in assets under management, following the listing of an additional 7,600,000 NewGold debentures.  

NewGold invests directly in gold and tracks the gold price.

Designed by Absa Capital, the investment banking division of Absa Bank Ltd and the leading originator of ETFs in South Africa, NewGold is an investment tool that allows institutional and retail investors to invest in a liquid, listed instrument that is fully backed by gold bullion.

Today’s announcement follows the early June milestone when NewGold cracked the $1bn mark of assets under management (R8.4bn at the exchange rate of R8.40 to the US dollar at the time).

Vladimir Nedeljkovic, Head of ETFs and Index Products at Absa Capital, said that since it launched, in November 2004, NewGold’s assets had grown dramatically and that he expected further flows into the popular investment product.

Accounting for the strong inflows of over R1bn into the fund over the past month and a half, Nedeljkovic said: “The poor economic outlook and general market instability are making investors the world over seek out the comfort of gold. Gold is often less volatile and can be better performing than investing in gold shares.