Morgan & Co launches ETFs for local industry

RYAN CHIGOCHE

 

Investment firm Morgan and Co will today launch an actively managed “Made in Zimbabwe’’ Exchange Traded Fund (ETF) as it gives another avenue for locals to invest in listed firms.

This becomes its second Exchange Traded Fund to be listed on the ZSE after the Multi-Sector ETF as ETFs have become one of the most popular investment vehicles for both institutional and individual investors due to their simplicity, cost-effective approach to investing, and the diversity they provide.

As the local industry is crucial to economic growth prospects this new Made in Zimbabwe  fund is set to be largely constituted by manufacturing companies listed on the Zimbabwe Stock Exchange with exposure to other non-manufacturing counters.

In a statement the investment firm said,  “The fund will be an actively managed fund with the objective of providing superior returns.’’

“A key aim of the fund is to support and invest in Zimbabwe’s manufacturing industry. The fund will also consider investing up to 20% of the ETF value in listed non-manufacturing companies and companies seeking to raise additional capital,’’ it said.

“The investment seeks capital appreciation. The fund will initially invest at least 80% of its investable assets in Zimbabwean listed manufacturing companies of any size.

Normally, the fund will be invested in Zimbabwe based manufacturing companies whose revenues are primarily derived from manufacturing processes while 20% may be invested in companies who fall outside of this scope.’’

In contrast to exchange-traded funds that only monitor the performance of a benchmark index, actively managed ETFs include managers or teams who make choices about the allocation of the underlying portfolio.

In this  new ETF more units can be issued at any time.

The portfolio consists of 9 counters namely Amalgamated Regional Trading Holdings, Hippo Valley Estates, Nampak, Turnall Holdings, Delta, Star Africa, British American Tobbacco Zimbabwe, Innscor, and Lafarge all contributing to an initial seed capital of ZWL$2.4bn with varying weights.

The fund will be listed on the Zimbabwe Stock Exchange and therefore units can be bought or sold through any stockbroker throughout the trading day, and through the online trading apps for small investors.

The Morgan & Co’s Made In Zimbabwe ETF units will be listed by way of introduction and no capital will be raised.

An introduction is more cost-effective and efficient because underwriters are excluded from the process, it said.

Related Articles

Leave a Reply

Back to top button