Ghana to list first commodity backed Exchange Traded Funds on bourse

The Ghana Stock Exchange (GSE) will see the listing of its first commodity backed Exchange Traded Funds on Wednesday, following the decision of South African group Absa Capital to list its gold-backed ETFs to help broaden the range of securities on the bourse.

This makes the Ghana Stock Exchange the fourth to list the NewGold ETFs after primary listing in South Africa and other listings on bourses in Nigeria and Botswana.

The fund will open on an initial offering split into 400,000 units, to test demand in the market before future possible expansion.

Kofi Yamoah, Managing Director, GSE said the listing on the bourse will help diversify the stock exchange away from the equities and bonds that currently dominate it.

“It is a means to deepen and broaden the security types that are available and traded on the bourse,” he said, adding that the listing will also provide the learning platform for the development of other ETFs in the future.

Besides, he said it would help boost capacity of dealers, fund managers and other market players.

Dr Vladimir Nedeljkovic, Head of Investments at Absa Capital, said in a statement that the ETFs would help investors willing to invest in multiple shares or assets.

“The introduction of Exchange Traded Funds to the GSE offers both individual and institutional investors a cost efficient and convenient way to invest in multiple shares or other assets, such as commodities, through a single security,” Dr Nedeljkovic said

NewGold, Africa’s largest ETF, is the best performing ETF on the continent over five years, with a return of 22.55% per year, a two year return of 24.76% and a return over three years of 21.66%.

As at August 1, 2012, NewGold’s assets under management were $2.15 billion.

NewGold is the only gold-backed ETF on the continent and is a simple and cost effective way of investing directly in physical gold bullion through a GSE listed share.

Source: GNA