The Ghana Stock Exchange (GSE) on Wednesday began trading its first ever Exchange Traded Funds (ETF) on the local bourse as part of measures to offer investors diversified portfolios. The Newgold ETF was introduced to the GSE by Absa Capital, the corporate and investment banking division of Absa Bank Limited, and affiliated with Barclays.This makes the GSE the fourth African bourse to list the NewGold ETF after South Africa, Botswana and Nigeria.

Four hundred thousand NewGold shares were listed at an opening bid price of GHc31.40, at a ceremony witnessed by top players in the industry.

ETFs are securities traded on exchange-like shares but which track the combined value of a portfolio or basket of underlying assets such as commodities and bonds.

ETFs afford investors the opportunity to own creation units that entitle them to a commensurate value of the underlying assets  (in this case gold) in quantities that would not have been possible if they were to purchase the actual assets.

Speaking on the trading floor of the GSE before the commencement of trading of the NewGold ETF, Mr Kofi Yamoah described the move as a significant achievement for the local bourse because “we are trading an asset which is gold”.

He said every investor could easily track the price of the commodity and know how much he/she was worth as far as the investment was concerned.

Mr Yamoah said the move was also expected to increase the liquidity of the GSE, and would bring more excitement.

The Head of Investments of Absa Capital, Dr Vladimir Nedeljkovic, said “the listing of the NewGold ETF on the GSE helps to further expand the Ghanaian investment market; the capital markets in Africa are still very underdeveloped, presenting an opportunity for significant growth in the region”.

“We believe that the ETFs present the gateway to this growth, but further market maturity is required, especially when assessing just how far more extensive global ETF offerings are”, he said.

Mr Nedeljkovic also said there could be no commodity which was as safe and risk-free as gold, and described the new window for investors as opportune for Ghanaian investors.

He said Absa Capital had more than 40 tonnes of bullion in actual gold sitting in London, and therefore, there could be no doubt about the credibility of the new investment portfolio.

The Managing Director of Barclays Bank Ghana, Mr Benjamin Dabrah, said the NewGold ETF was the largest traded funds in Africa, and that being introduced in Ghana was a plus for the country.

He added that gold was the safest commodity to trade in because it had proven to be the most valuable even in turbulent times.

“This new window is good for the pension fund managers in the country and we hope they will explore that to the fullest”, he said and used the occasion to wish the GSE well in its future endeavours, and as it traded in the new commodity on the local bourse.

Madam Batsile Ngomane of the Investments unit, Absa capital, said there were no limits to what investors could buy and noted that there was no reason for anybody interested to panic.

She said a shareholder could sell his/her shares at any time, and that there would be a buyer, adding that “this is one unique feature of this NewGold ETF”.