Business - Companies & Markets - Finance - Local - December 2, 2020

ZSE approves Old Mutual Zimbabwe to establish an ETF

THE Zimbabwe Stock Exchange (ZSE) approved the Old Mutual Zimbabwe Stock Exchange to establish an Exchange Traded Fund (ETF) that tracks the ZSE Top Ten Index.

ZSE Top Ten Index consists of the top ten (10) counters by market capitalisation that is listed on the stock market.

The recently introduced Exchange Traded Funds (ETFs) are part of efforts by the domestic bourse to offer wide investment choices.

ETFs are passively managed, fully funded open-ended funds that track the performance of a specified security. These include but are not limited to indices, commodities, currencies, or any other asset.

Old Mutual Investment Group Zimbabwe recently announced that the ETF will be listed on the 4th of January 2021 under the name Old Mutual Zimbabwe Stock Exchange Top Ten Exchange Traded Fund.

“Old Mutual Zimbabwe Limited is putting initial seed capital on the day of listing. Additional investments from other investors will be used to buy shares on the market and add to the portfolio.”

“Investors who wish to invest in the fund can do so through buying units in the ETF through any registered Stockbroker or alternatively investing in kind by delivering a basket of stocks in the exact weights of the fund through an authorized participant. Currently, the authorised participant is Old Mutual Investment Group Zimbabwe (Private) Limited,” said Old Mutual in a statement.

All assets of the fund will be held by CABS Custodial Services, who will act as the Custodian for the fund, while Stanbic Bank Zimbabwe Limited is the Trustee.

Settlement of trades in the units will be done in electronic format in accordance with the settlement modalities approved by the ZSE.

“Old Mutual Investment Group Zimbabwe (Private) Limited, the ETF fund manager, will be responsible for periodically replicating the ZSE Top Ten index in line with the index Ground Rules as defined by the ZSE. The reference Top Ten index will be reviewed once a quarter.”

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