NEWGOLD EXCHANGE TRADED FUND

NewGold ETF is one of the simplest and cost-effcient methods for investors to invest directly
in physical gold.
What are Exchange Traded Funds?
An Exchange Traded Fund (or ETF) is an investment vehicle traded on a stock exchange, much like shares. Most ETFs
are passively managed index funds which normally track an index, with their main objective being to participate in the
economic growth of an industry, sector or commodity. ETFs provide the attraction of the returns of a traditional tracker fund
(like unit trusts) with the liquidity of a listed security. ETFs are traded at prevailing market prices, which are approximately
the same price as the Net Asset Value (NAV) of their underlying assets over the course of the trading day.
Individual investors should view ETFs as core, long-term investments.
Why invest in ETFs as an alternative to other similar investments?
Low Cost - Because ETFs are designed to closely track the performance of their respective benchmarks, they have less
frequent portfolio changes than actively managed funds, making them less expensive to operate. Additionally, because
subscriptions and redemptions occur in-specie, there are fewer internal costs associated with operating ETFs, resulting
in the overall lower costs associated with ETFs.
Tradability - ETFs provide investors with the ability to gain exposure to a broad market in one transaction as they trade
on a stock exchange throughout the trading day. Investors buy and sell ETFs like shares, typically through a stock broking
account or through an accredited fnancial services provider by means of an investment plan.
With unit trust investments, managed by active fund managers, investors are not aware at what prices their securities are
bought or sold. Most actively managed funds are bought and sold at the closing days NAV and all buy and sell transactions
are conducted directly with the fund company. In contrast, ETFs are bought and sold on a stock exchange throughout the
day based upon market prices, which fuctuate according to supply and demand.
Transparent - Actively managed funds report their holdings on a quarterly or less frequently basis whereas ETFs disclose
their portfolio holdings on a daily basis. The ETF performance and portfolio composition are a refection of the underlying
index as the holdings of an ETF closely mirror the underlying index it tracks as a benchmark. This provides ETF investors
with a greater degree of fnancial transparency.
Diversifed investment - ETFs give investors a straightforward and inexpensive way to obtain a broad exposure to a
given index, sector, country or commodity compared to the purchase of several individual company shares.
NEWGOLD EXCHANGE TRADED FUND
Advantages of ETFs
- ETFs provide a diversifed exposure through buying a single share
- ETFs offer a market related performance or return
- Straightforward access to the performance of key indices and sectors
- A cost effective way of trading a basket of shares through a single transaction
- Automatic portfolio rebalancing of the constituent holdings of the respective index
- The fexibility to buy and sell the ETF securities during JSE trading hours
- A convenient method to invest and realise returns on investment
- The convenience of calculating the value of the ETF investment at any time
- Provide an opportunity for individuals and smaller institutions to track a market
Disadvantages of ETFs
ETFs operate on the principle that in the medium to long term, tracking specifc markets, indices or commodities offer better
after-cost returns than unit trusts that trade through active fund managers. The ETF investor therefore does not trade to
beat the market, but banks on returns from the consistency of being the market.
What are the risks associated with ETFs?
- Investment in ETFs involve numerous risks including, general market risks, interest rate risks, exchange rate risks,
infationary risks, liquidity risks and legal and regulatory risks.
- The value of an investment in an ETF may increase as well as decrease as the market changes.
- ETFs are not capital protected and therefore investors may not get back the amount invested.
How can investors profIt from ETFs?
As with any other security, investors usually buy and sell their ETFs through the securities exchange. Profts (or losses) are
made from the difference between the buying and selling prices. Like any other security, ETFs do however carry the risk of
losing rather than gaining money. Individual investors should view ETFs as core, long-term investments designed to reduce
the price fuctuations that generally characterise arbitrary buying and selling of securities.
What are the investment strategies that can be used by investors with ETFs?
Asset Allocation - Managing asset allocation could be diffcult for individual investors given the costs and assets required
to achieve proper levels of diversifcation. ETFs provide investors with exposure to broad segments of the equity markets
to conveniently, effciently and affordably allocate their assets.
Cash Management - Investors typically seek exposure to equity markets, but often need time to make investment decisions.
ETFs provide a parking place for cash that is designated for equity investment. Because ETFs are liquid, investors can
participate in the market while deciding where to invest their money for equity investments.
NEWGOLD EXCHANGE TRADED FUND
Hedging risks - ETFs are effective hedging tools for managing risk. For example, investors can guard against over concentrated
equity positions by using ETFs as single stock substitutes. This hedging technique can reduce risk and volatility by letting
stockholders diversify away from large equity positions to the companies they own or work at.
Transition Management - When institutional investors change asset managers, one of their over-riding concerns is preserving
the ability to maintain equity exposure while the transition occurs. One way to achieve this goal is to liquidate the portfolio while
simultaneously buying ETFs. Once the assets are transitioned, the new manager can redeem the ETF shares to pay for their
share purchases.
Core-satellite Strategy - This strategy is a blend of index and active investing. Index investments, such as ETFs become the
foundation of the portfolios construction and actively managed investments are added as satellite positions. With this approach,
investors index their core holdings to more effcient asset classes and limit their selection to active managers that deliver
consistent alpha or outperformance for other categories.
Sector Rotation - Convenient market exposure to various industry sectors is readily obtained with ETFs. By tactically shifting
assets, investors can over and underweight specifc sectors according to their fnancial research, economic outlook, or market
objective. Owning or selling concentrated business segments allows ETF investors to capitalise on both positive and negative
sector trends.
Debunking the myths around investing in ETFs
Myth 1: The best ETFs to own are
The best ETFs to own are the ones that help investors reach their own unique fnancial goals. Just because a certain ETF is
popular, heavily advertised, or widely followed, does not necessarily deem it better than other ETFs or an appropriate choice for
a particular investor. Instead of focusing on one or two individual funds, an investor should concentrate on building a portfolio
of ETFs that offer broad exposure to key asset classes like shares, bonds, commodities, real estate etc.
Myth 2: ETFs are only for day traders and short-term investors
The truth is that ETFs are effective portfolio building tools for all types of investors. While ETFs are often used by active
investors as trading vehicles, they can be effectively used by buy-and-hold or long-term investors. One investor may purchase
a particular ETF to hedge, while another may purchase the same ETF with a different strategy, perhaps, for example, to grow
capital. The unique product design of ETFs allows investors with both similar and dissimilar investment objectives to own the
same fund and still accomplish their goal.
Myth 3: ETFs are the same as individual shares
Even though ETFs are traded on major stock exchanges alongside individual shares, they are not the same as shares. Rather,
ETFs consist of an underlying portfolio of securities that is designed to follow a specifc index or investment strategy.
ETFs are typically more diversifed than individual shares.
NEWGOLD EXCHANGE TRADED FUND
NewGold
Absa Capitals NewGold Exchange Traded Fund (NewGold) was initially launched on the Johannesburg Stock Exchange
(JSE) in November 2004. NewGold was designed to track the price of gold and create an investment tool enabling institutional
and retail investors to invest in a listed instrument (structured as a debenture) that is fully backed by gold bullion.
Each NewGold security is equivalent to approximately 1/100 ounces of real gold bullion held in a secured stockpile of gold
bullion.
Underlying Asset
Allocated Account
All NewGold gold bars are held in an allocated account - An allocated account is an account held in a customers name
evidencing that uniquely identifable bars of gold have been allocated to the customer and are segregated from other
metal held in the vault of that dealer. The client has full title to this gold with the dealer holding it as custodian and therefore
does not carry third party credit risk.
Gold Delivery Bars
All gold is kept in the form of London Gold Delivery Bars and Good Delivery Standards are prescribed by LBMA. For more
information - www.lbma.org.uk
Custodian
The gold is kept in the vault of the Custodian, Brinks Limited.
Fees
Management fee: 0.40% p.a. accrued daily and debited in gold monthly in arrears.
Fund Facts
As at 30 September 2011
Issuer NewGold Issuer Limited
Manager NewGold Manager (Pty) Ltd
Originators Absa Bank Limited acting through the Absa Capital division
ISIN ZAE000060067
Primary Listing Date 02 Nov 04
Net asset value (South Africa) R18,796,399,201.13
No of issued securities (South Africa) 147,236,300
No of tonnes 44.54
No of ounces 1,432,115.68
NEWGOLD EXCHANGE TRADED FUND
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fuctuate so that
an investors shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted.
Performance data current to the most recent month-end may be obtained by calling +27(0)11 895 5517 or by visiting www.absacapitaletfs.com
NewGold Performance
Performance History as of 30 September 2011*
*Source: Absa Capital
*Source: Calculated by Absa Capital
*Source: Absa Capital
IUND DL1AILS
lssuer newCold lssuer LLd
Manager newCold Manager (Ly) LLd
CrlglnaLor Absa CaplLal
SecLor Lxchange 1raded lunds
!SL code CLu
lSln ZAL000060067
8ase currency ZA8
LlsLlng daLe 02 november 2004
neL asseL value 18,796,399,201.13
newCold prlce 127.66
Annuallsed 1L8 * 0.40
no. of securlLles lssued 147,236,300
CuanLlLy of gold held (Lonnes) 44.34
CuanLlLy of gold held (oz) 1,432,113.68
Cold enLlLlemenL per debenLure 97.27
* 5ootce . Abso copltol
LkICkMANCL nIS1Ck AS CI 30 September 2011*
1 - ?ear 2 - ?ear 3 - ?ear
Slnce
lncepLlon
Annuallsed reLurn 43.28 31.32 20.78 23.78
LasL monLh reLurn: 3.12
8eLurn slnce lncepLlon: 388.13
IUND C8ILC1IVLS
Absa CaplLal's newCold Lxchange 1raded lund (newCold) ls one of Lhe
slmplesL and cosL-efflclenL meLhods for lnvesLors Lo lnvesL dlrecLly ln
acLual gold. newCold conLlnuously Lracks Lhe gold prlce and enables
lnvesLors Lo lnvesL ln a llsLed lnsLrumenL (sLrucLured as a debenLure) ln
whlch each securlLy ls equlvalenL Lo approxlmaLely 1/100 ounces of gold
and ls fully covered by holdlngs of gold bulllon wlLh Lhe newCold
CusLodlan, 8rlnks LlmlLed.
newCold ls Lhe flrsL and only producL ln SouLh Afrlca Lhrough whlch
lnsLlLuLlonal and reLall lnvesLors can securely lnvesL dlrecLly ln gold bulllon
aL compeLlLlve managemenL fees. ln March 2008, Absa 8ank's Sharl'ah
8oard, made up of speclallsed [urlsLs ln Sharl'ah lslamlc Law, lssued a rullng
sLaLlng LhaL Lhe newCold L1l complles wlLh Sharl'ah. As such lL ls ln llne
wlLh lslamlc prlnclples of eLhlcal lnvesLlng.
1he performance quoLed represenLs pasL performance and does noL guaranLee fuLure
resulLs. lnvesLmenL reLurn and prlnclpal value of an lnvesLmenL wlll flucLuaLe so LhaL
an lnvesLor's debenLures, when sold or redeemed, may be worLh more or less LhaL Lhe
orlglnal cosL. CurrenL performance may be lower or hlgher Lhan Lhe performance
quoLed. erformance daLa currenL Lo Lhe mosL recenL monLh end may be obLalned by
calllng (011) 893 3317 or by vlslLlng www.absacaplLaleLfs.com.
*5ootce. Abso copltol
* 5ootce . Abso copltol
* As publlshed on llnswlLch for Lhe quarLer ended 30 !une 2011
30 SepLember 2011
NLWGCLD LkCnANGL 1kADLD IUND
ASSL1 ALLCCA1ICN*
Cold
NewCold Frice (Daily Close)*
35.00
55.00
75.00
95.00
115.00
135.00
155.00
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1,800,000
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P/eose reod the disc/oimer ot the end of this document
* 5ootce . colcoloteJ by Abso copltol
IUND DL1AILS
lssuer newCold lssuer LLd
Manager newCold Manager (Ly) LLd
CrlglnaLor Absa CaplLal
SecLor Lxchange 1raded lunds
!SL code CLu
lSln ZAL000060067
8ase currency ZA8
LlsLlng daLe 02 november 2004
neL asseL value 18,796,399,201.13
newCold prlce 127.66
Annuallsed 1L8 * 0.40
no. of securlLles lssued 147,236,300
CuanLlLy of gold held (Lonnes) 44.34
CuanLlLy of gold held (oz) 1,432,113.68
Cold enLlLlemenL per debenLure 97.27
* 5ootce . Abso copltol
LkICkMANCL nIS1Ck AS CI 30 September 2011*
1 - ?ear 2 - ?ear 3 - ?ear
Slnce
lncepLlon
Annuallsed reLurn 43.28 31.32 20.78 23.78
LasL monLh reLurn: 3.12
8eLurn slnce lncepLlon: 388.13
IUND C8ILC1IVLS
Absa CaplLal's newCold Lxchange 1raded lund (newCold) ls one of Lhe
slmplesL and cosL-efflclenL meLhods for lnvesLors Lo lnvesL dlrecLly ln
acLual gold. newCold conLlnuously Lracks Lhe gold prlce and enables
lnvesLors Lo lnvesL ln a llsLed lnsLrumenL (sLrucLured as a debenLure) ln
whlch each securlLy ls equlvalenL Lo approxlmaLely 1/100 ounces of gold
and ls fully covered by holdlngs of gold bulllon wlLh Lhe newCold
CusLodlan, 8rlnks LlmlLed.
newCold ls Lhe flrsL and only producL ln SouLh Afrlca Lhrough whlch
lnsLlLuLlonal and reLall lnvesLors can securely lnvesL dlrecLly ln gold bulllon
aL compeLlLlve managemenL fees. ln March 2008, Absa 8ank's Sharl'ah
8oard, made up of speclallsed [urlsLs ln Sharl'ah lslamlc Law, lssued a rullng
sLaLlng LhaL Lhe newCold L1l complles wlLh Sharl'ah. As such lL ls ln llne
wlLh lslamlc prlnclples of eLhlcal lnvesLlng.
1he performance quoLed represenLs pasL performance and does noL guaranLee fuLure
resulLs. lnvesLmenL reLurn and prlnclpal value of an lnvesLmenL wlll flucLuaLe so LhaL
an lnvesLor's debenLures, when sold or redeemed, may be worLh more or less LhaL Lhe
orlglnal cosL. CurrenL performance may be lower or hlgher Lhan Lhe performance
quoLed. erformance daLa currenL Lo Lhe mosL recenL monLh end may be obLalned by
calllng (011) 893 3317 or by vlslLlng www.absacaplLaleLfs.com.
*5ootce. Abso copltol
* 5ootce . Abso copltol
* As publlshed on llnswlLch for Lhe quarLer ended 30 !une 2011
30 SepLember 2011
NLWGCLD LkCnANGL 1kADLD IUND
ASSL1 ALLCCA1ICN*
Cold
NewCold Frice (Daily Close)*
35.00
55.00
75.00
95.00
115.00
135.00
155.00
S
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p
-
0
6
M
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Quantity of Cold Held (Ounces)*
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
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P/eose reod the disc/oimer ot the end of this document
* 5ootce . colcoloteJ by Abso copltol
1 Year 2 Year 3 Year Since Inception
Annualised Return 43.28% 31.52% 20.78% 25.78%
Last month return: 3.12%
Return since inception: 388.13%
How to invest in NewGold?
Directly, through a stockbroker:
- Costs:
- Broker fees: negotiated between the clients and the broker
- Standard Statutory fees apply
NEWGOLD EXCHANGE TRADED FUND
Contact Details
NewGold Manager
+27 (0)11 895 5517
ETF@absacapital.com

+27 (0)11 895 6000 :: 15 Alice Lane, Sandton, 2196, South Africa :: www.absacapitaletfs.com
FAIS Act Notice and Disclaimer
This brochure/document/material/report/communication/commentary (this commentary) has been prepared by Absa Capital, the investment banking division of Absa Bank
Limited a registered bank in the Republic of South Africa with company registration number: 1986/004794/06 and with its registered offce at: Absa Towers East, Main Street 170,
Johannesburg, Republic of South Africa (Absa). Absa is regulated by the South African Reserve Bank. Absa has issued this commentary for information purposes only and you
must not regard this as a prospectus for any security or fnancial product or transaction. Absa does not expressly, tacitly or by implication represent, recommend or propose that
the securities and/or fnancial or investment products or services (the products) referred to in this commentary are appropriate and/or suitable for your particular investment
objectives or fnancial situation or needs. This commentary is not, nor is it intended to be, advice as defned and/or contemplated in Financial Advisory and Intermediary
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(advice). You have to obtain your own advice prior to making any decision or taking any action whatsoever based hereon and Absa disclaims any liability for any direct,
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which shall always be subject to Absas internal approvals and a formal agreement between you and Absa. Any pricing included in this commentary is only indicative and is
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and (f) currency exchange. The value of any product may fuctuate daily as a result of these risks. Absa does not predict actual results, performances and/or fnancial returns
and no assurances, warranties or guarantees are given in this regard. The indicative summaries of the products provided herein may be amended, superseded or replaced by
subsequent summaries without notice. The information, views and opinions expressed herein are compiled from or based on trade and statistical services or other third party
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or guarantee concerning the accuracy, adequacy and/or completeness of the information or any view or opinion provided or expressed herein. Any information on past fnancial
returns, modelling or back-testing is no indication of future returns. Absa makes no representation on the reasonableness of the assumptions made within or the accuracy or
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offering material shall only be distributed in or from any jurisdiction in circumstances which will result in compliance with any applicable laws and regulations and which will not
impose any obligation on Absa or any of its affliates. In this commentary reference is made to various indices. The publishers and sponsors of those indices (the publishers
and sponsors) do not endorse, sponsor or promote the products and make no warranty, guarantee, representation or other assurance (express, tacit or implied) relating to the
indices. The publishers and sponsors make no warranties (including merchantability and ftness for purpose). The publishers and sponsors shall not incur any liability in respect
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the composition or calculation of indices and have no obligation to have regard to your or Absas need in this regard. The information and views contained in this commentary
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