Stability Over Yield Marks NewGold ETF’s Latest Financials

NewGold Issuer (RF) Ltd, the entity behind the NewGold ETF (JSE:GLD, GSE:GLD.GH) listed on the Johannesburg and Ghana Stock Exchanges, released its unaudited financial statements for the half year ending 30 September 2025. The results confirm structural integrity and full bullion backing while highlighting weaker fee income, compressed profitability, and moderate over-distribution. For global investors, the statement reinforces NewGold’s role as a transparent physical gold tracker linked to XAUUSD, but signals limits to its dividend and growth potential.

Bullion holdings rose from USD 2.24 billion to USD 2.64 billion, an increase of roughly 18 percent, broadly consistent with gold’s rise over the same period (XAUUSD ≈ USD 2,320 → 2,740). Debenture liabilities expanded in exact proportion to USD 2.64 billion, preserving near-perfect parity between bullion assets and investor obligations. The structure functions as a secured note system, where each ETF unit is matched by vaulted gold held with appointed custodians. This design leaves the issuer with negligible market or credit exposure beyond operational custody risk.

Revenue declined 31.7 percent to USD 3.81 million, while finance income halved to USD 0.16 million. Operating expenses fell to USD 0.69 million, but not enough to offset lower inflows. Profit before tax dropped to USD 3.63 million from USD 5.03 million (-27.9 percent), and net profit decreased to USD 2.69 million (-26.9 percent). The fair-value gain on bullion (USD 455.86 million) was exactly counterbalanced by a fair-value loss on debentures, demonstrating full accounting symmetry rather than trading profit. The contraction reflects weaker primary-market creation and redemption activity, not deterioration in asset quality.

Liquidity remained strong. Cash and cash equivalents rose to USD 5.03 million from USD 3.41 million, while payables totaled USD 1.88 million, giving a cash-to-payables ratio of 2.7×. Operating cash flow of USD 2.70 million covered dividend payments of USD 1.36 million roughly twice over, but total dividends slightly exceeded reported net profit (Profit/Dividend ≈ 0.95×). Retained earnings declined to USD 1.13 million from USD 1.26 million, reflecting small equity erosion. These figures show that liquidity buffers are adequate, though dividend levels may need to normalize if revenue remains subdued.

Currency effects were largely cosmetic. In rand terms, total assets rose from ZAR 41.3 billion to ZAR 45.7 billion, driven by both gold appreciation and ZAR/USD depreciation of about 3 percent over the period. The translation reserve improved slightly from –USD 0.91 million to –USD 0.87 million, confirming minimal foreign-exchange impact on USD earnings.

The financial pattern sends three consistent messages. Structurally, NewGold remains a fully collateralized, zero-leverage ETF—the balance sheet expands and contracts strictly with bullion value. Operationally, earnings reflect cyclical fee compression linked to asset-under-management fluctuations. Financially, its dividend policy edges above sustainable profit generation. None of these outcomes signal weakness, but they mark the boundaries of its income capacity.

For global investors, NewGold ETF continues to serve as a pure XAUUSD exposure vehicle rather than an income instrument. Its custodial structure ensures traceable metal ownership under South African regulation, with secondary-market liquidity on both the JSE and GSE. The ETF’s total return will mirror gold’s performance net of a small expense ratio; higher gold prices expand its net asset value automatically, while declines reduce it symmetrically. Investors seeking inflation protection, currency diversification, or defensive positioning can treat GLD as a low-risk holding tied directly to gold. Those targeting yield or alpha should recognize that NewGold’s profit cycle depends on management fees, not trading results, and that recent statements point to modest, not expanding, earnings power.

The September 2025 results therefore confirm a stable and solvent fund with flawless asset-liability symmetry but shrinking profit margins. NewGold remains a dependable, exchange-listed representation of physical bullion—an effective store-of-value allocation within a diversified global portfolio, though not a vehicle for income or performance outperformance.