Old Mutual Zimbabwe Limited yesterday launched an Exchange Traded Fund (ETFs) to be listed on the Zimbabwe Stock Exchange (ZSE) on 04 January 2020.
ETF is a basket of securities that trade on an exchange, just like a stock according to Investopedia. ETFs also include bonds, Industry, Commodity and Currency ETFs.
The established ETF called Old Mutual Zimbabwe Stock Exchange Top Ten Exchange-Traded Fund Trust tracks the ZSE Top Ten Index.
“Old Mutual Zimbabwe Limited is putting initial seed capital on the day of listing.” read the announcement of the ETF.
“Additional investments from other investors will be used to buy shares on the market and add to the portfolio.”
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 according to the Old Mutual announcement of the fund.
“Settlement of trades in the units will be done in electronic format in accordance with the settlement modalities approved by the Zimbabwe Stock Exchange,” reads the announcement.
“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,” Old Mutual says.
Currently, the authorised participant in the fund is Old Mutual Investment Group Zimbabwe (Private) Limited.
“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,” Old Mutual says.