NSE promotes gold as viable option in the current investment landscape

Now more than ever, investors are looking for newer investment options that can provide the much-needed diversity to their portfolios. In presenting some of the instruments available to the investing public, the Nigerian Stock Exchange (NSE) partnered with ABSA Securities Nigeria to host a webinar on Thursday, 9 April 2020. With the theme, “Using Alternative Investments Classes to Navigate Uncertain Times”, the webinar delved into the value of Gold as a viable investment option and the ease of access the NewGold Equity Traded Fund (ETF) provides for investors who are ready to take advantage of the opportunity.

Speaking during the webinar, the Head, Trading Business Division, NSE, Mr. Jude Chiemeka said, “As a multi-asset class Exchange hub, we recognize opportunities in the alternative investment asset space for the Nigerian Capital Market and are working assiduously with stakeholders to provide more insight into these instruments. Historically, Gold – which is categorized under the commodities segment of alternative investment classes – has been recognized as a safe haven asset used to provide stability to portfolios in times of market uncertainty.” He further expressed his delight over the partnership with ABSA and the opportunity to demystify investing in Gold from a fundamental and trading perspective.

Shedding more light on the opportunities Gold has to offer, Head, Exchange Traded Products (ETP) Business, ABSA Regional Operations, Mr. Michael Mgawaba, explained that Gold is not only defensive, but it can also be used for risk management and delivers impressive results. He said, “What distinguishes Gold is its performance during crises. It has been known to have a negative correlation with economic crisis which means that in an economic downturn, when other investment classes are going down, Gold tends to go up.”

It was further highlighted that investing in Gold is now easier than ever with the NewGold ETF that is listed on the Nigerian Stock Exchange. Speaking to the modalities of investing in this product, Managing Director, ABSA Securities Nigeria, Mr. Akinkunmi Majaro stated, “An investment in the NewGold ETF is simply an investment in gold, but in electronic form. It trades like any other security with no buying or selling restrictions and has returned 29% YTD, 31.75% in 2019 and over 131% since its listing in 2011. Furthermore, because it is an open-ended instrument, new units can always be created to satisfy demand.”

Suffice to say that investors looking for an instrument that offers safety and liquidity should begin to look more closely at Gold and the NewGold ETF. On its part, the NSE continues to provide avenues for engagement on its various products and service to enhance investors’ knowledge and deepen capital market activity even in these challenging times.