Friday, 1st September 2006 (5094 views)

The market capitalisation of South Africa's NewGold Exchange Traded Fund (ETF) rose to 1.55 billion rand by the end of July.

NewGold has outperformed the Australian Gold Bullion Securities ETF, which itself had a market capitalisation of $196 million at the same time, Mineweb reports.

A gold ETF is a fund backed by physical gold that means people can invest in gold without having to actually take delivery of the metal itself.

Australia's Gold Bullion Securities was the first gold ETF to launch, in 2003. Other stock exchanges with gold ETFs include London, New York and Paris.

When NewGold was launched in late 2004, it had 800,000 traded securities worth 26.3 rand each. By July this year, this number had grown to 35.6 million, with each one being worth 43.5 rand.

A spokesman for Absa Capital, which helped develop NewGold, said: "The progress of NewGold has exceeded our expectations and we are very happy with the investor interest that has been shown in the product.

"It has certainly established itself as an important investment and asset diversification vehicle."

In the current climate of international diplomatic tension, gold is a safe bet for investors and gold funds have enjoyed an upsurge as a result.

 

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