NewGold fund launch marks arrival of Kenya’s first ETF

Mar 31st, 2017 | By | Category: Commodities

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The NewGold ETF has launched on the Nairobi Stock Exchange, becoming Kenya’s first ETF to list in the country. The fund, launched by NewGold Issuer, gives Kenyan institutional and retail investors access to the spot price of gold.

Kenya Nairobi Stock Exchange ETF

The launch of the NewGold ETF on Nairobi Stock Exchange marks the arrival Kenya’s first ETF

Its exposure is gained through listed instruments (structured as debentures) in which each security is equivalent to approximately 1/100th ounces of gold and is fully backed by holdings of gold bullion with Barclays Bank.

The NewGold ETF was first listed on the Johannesburg Stock Exchange in 2004 and has subsequently been cross-listed across other African exchanges including Botswana, Nigeria and Ghana, as well as on the Mauritius Stock Exchange. Last month, it was approved for launch in Kenya by the country’s securities regulator – the Capital Markets Authority (CMA).

NewGold Issuer, an affiliate of Barclays, has issued 400,000 Gold Bullion Debentures on the Nairobi Securities Exchange main investment market segment.

The move will diversifying the current investment offering in Kenya which is comprised of local equities and bonds only.

CMA Chief Executive Paul Muthaura commented: “This is a critical milestone in positioning Kenya as a gateway for regional and international capital flows by developing creative products that promote investor confidence in regional products. This is a step toward Kenya becoming a choice investment destination.”

The ETF has a total expense ratio of 0.40%.

The listing highlights the benefit of ETFs in providing an opportunity for investors in emerging market countries to diversify their investment portfolios with access to international products.

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