Newgold Fund is Nigeria Winner With 64% Gain

By Chuks Emele

Monday, 5 October 2020

Newgold Exchange-Traded Fund put up a stellar performance on the Nigerian Stock Exchange this year, with year-to-date gains of 64 percent at the close of trading last week.

Newgold peaked in September

The security first listed in Nigeria by South Africa’s Absa Group in 2011, has drawn a surge of investors seeking safe havens in gold and other metals as oil and stock markets around the world took a beating from the coronavirus pandemic.  

Exchange-traded funds are usually a collection of investment instruments traded as a group on an exchange. Newgold ETF tracks gold prices on the Johannesburg Stock Exchange. Gold prices are up 25 percent in the spot market since the start of the year. The Nigerian Stock Exchange All-Share Index has inched up 0.5 percent since the start of the year.

With the security closing at 8,830 naira on October 2, an investor who paid 5,350 naira per unit on the first trading day of the year would’ve gained 3,400 naira each, or 64 percent. If the investor bought on January 27, when the fund was at a year low of 2,000 naira,  then the profit would be even more spectacular at 338 percent, a gain of 6,750 naira on each unit.

The market value of Newgold has equally surged on the back of this demand for alternative investments, currently exceeding 13 billion naira from under 8 billion naira at the start of the year.