Absa first to secondary list ETFs on A2X

2019-07-04T09:21:40+00:00 July 4th, 2019|News|

Absa Corporate and Investment Bank (Absa CIB) are to secondary list three of its market-leading metal exchange traded funds (ETFs) on A2X Markets.

Absa first to secondary list ETFs on A2X

Image credit: techcentral.co.za

The three ETFs will retain primary listings on the JSE and will now also be available for trade on A2X from 11 July 2019. The ETFs are:

  • NewGold (GLD)
  • NewPlat (NGPLT) and
  • NewGold Palladium (NGPLD

According to Chris Edwards, head of prime services and index solutions at Absa Corporate and Investment Bank, Absa is the first issuer to offer investors the option of transacting in their metal ETFs on an alternative low-cost platform as well as the traditional JSE. “ETFs are cost-sensitive and by adding a secondary listing, it allows our investors to capture not only the direct saving of lower transaction fees but also the indirect savings that accrue as result of narrower spreads and increased liquidity,” says Edwards.

Kevin Brady, CEO at A2X says that ETFs are experiencing significant growth due to their low cost. “These three large metal funds account for over 30% of the value of all ETF funds listed in SA,” says Brady.

A2X is a licensed stock exchange which provides a secondary listing venue for companies. It is regulated by the Financial Sector Conduct Authority and the Prudential Authority (SARB) in terms of the Financial Markets Act. A2X began trading in October 2017 and has nine approved brokers that account for about 50% of market activity.

The NewGold ETF fund offers the opportunity to invest in gold bullion, as it tracks the Rand price of gold. The debentures are fully backed by physical gold bullion with each debenture approximately equivalent to 1/100th of a fine troy ounce of gold bullion, which is held with a secure depository on behalf of investors at an annual fee of 0.4% of its value.

Classified as a domestic investment, NewGold ETF was the first of its kind in South Africa to allow institutional and retail investors to securely, easily and conveniently invest in gold bullion, with the added benefit of a low management fee. At launch, it was the third commodity ETF in the world and was, until recently, the only commodity ETF on the JSE.

NewPlat ETF offers the opportunity to invest in platinum bullion, as it tracks the Rand price of platinum. The debentures are fully backed by physical platinum bullion with each debenture approximately equivalent to 1/100th of a fine troy ounce of platinum bullion, which is held with a secure depository on behalf of investors. The annual management fee is 0.4% of the value of the debenture.

Classified as a domestic investment, NewPlat ETF offers a simple and cost-effective method to invest in physical platinum bullion. NewGold Issuer Limited issues listed instruments (structured as debentures) backed by physical holding of precious metals.

The NewPalladium ETF offers the opportunity to invest in palladium bullion, as it tracks the Rand price of palladium. The debentures are fully backed by physical palladium bullion with each debenture approximately equivalent to 1/100th of a fine troy ounce of palladium bullion, which is held with a secure depository on behalf of investors. The annual management fee is 0.4% of the value of the debenture.

Classified as a domestic investment, NewPalladium ETF offers a simple and cost-effective method to invest in physical palladium bullion. NewGold Issuer Limited issues listed instruments (structured as debentures) backed by physical holding of precious metals.