Investing P5000 in NewGold ETF vs P5000 in Serala savings (Absa Bank)

Good afternoon 😃🌞! Let’s get into today’s article.

I always like to compare the amount of money that stocks, ETFs and savings accounts can yield for me. In this scenario I was thinking about if perhaps I would have invested in NewGold ETF instead of NewGold Plat last year what could have happened.

But now I wanted to see if I could have invested in Absa Serala instead versus NewGold ETF. And I found the difference in yield to be staggering let’s find out:

Now Let’s compare the returns of saving P5,000 in the Absa Serala Savings Account versus investing the same amount in the NewGold ETF on the Botswana Stock Exchange (BSE) from April 2024 to April 2025.

Option 1: Absa Serala Savings Account

• Interest Rate: 3.6% per annum (compounded annually)

• Initial Deposit: P5,000

Calculation:

P5,000 × (1 + 0.036) = P5,180

Total Interest Earned: P180

Option 2: NewGold ETF (BSE: NEWGOLD)

• Initial Investment: P5,000

• Share Price in April 2024: Approximately P277.10

• Share Price in March 2025: P376.84

Calculation:

1. Number of Shares Purchased:
   P5,000 ÷ P277.10 ≈ 18.04 shares

2. Value in March 2025:
   18.04 shares × P376.84 ≈ P6,798.90

Total Gain: P6,798.90 - P5,000 = P1,798.90

Summary

Conclusion

Investing in the NewGold ETF would have yielded a significantly higher return compared to saving in the Absa Serala Savings Account over the same period. The ETF investment would have grown by approximately 36%, while the savings account would have grown by 3.6%.

Note: The NewGold ETF’s performance is based on gold prices, which can be volatile. While it offered higher returns in this period, it’s essential to consider the associated risks. In contrast, savings accounts offer more stable but lower returns.

But at the end of the day it also depends on how risk tolerant are you, would you go for NewGold ETF or Serala Savings account?