This archive report was first published on 11 January 2020.
Investing in Gold in Kenya ¶
Kenyan investors can now trade gold through the Nairobi Securities Exchange's NewGold ETF, a financial instrument linked to physical gold bullions in London.
The NewGold ETF was launched in August 2017, making it the first and only exchange-traded fund (ETF) at the NSE.
Unlike trading in physical gold, which can be associated with illicit activities, the NewGold ETF provides a legitimate and regulated way for investors to buy and sell gold.
The ETF is listed as 'NewGold ETF' and can be found at the bottom of the list of share prices in local dailies.
It's worth noting that the price of the ETF share is not the price of the gold itself, but rather determined by international market forces and complex algorithmic factors.
Despite its relative stability, the NewGold ETF has seen fluctuations in price since its launch, with a high of Sh1,495 in October 2019 and a low of Sh1,165 in December 2018.
As a certified accountant and former financial auditor, I believe that Kenyan investors have the potential to diversify their investment portfolios into complex derivatives like the NewGold ETF.
However, the high initial investment and unfamiliarity with the instrument may be deterring some investors from participating.
As the Kenyan stock exchange continues to mature, I hope to see more instruments like the NewGold ETF being introduced, providing investors with a wider range of options for diversifying their portfolios.
