Retail investors drive ETFs rally

LIVINGSTONE MARUFU

Wider retail investors  participation in the Zimbabwe Stock Exchange listed exchange traded funds (ETFs)  has seen a significant  uptick in the Morgan &Co Multi-Sector and Old Mutual ZSE Top 10 ETFs in the past two months, Business Times can report.

The Morgan &Co Multi-Sector ETF surged 35% to  hit a new high of ZWL$1.859bn this week from ZWL$1.382bn reported in January.

The price of the ETF also gained 45% to ZWL$14.45  from ZWL$10.

The Old Mutual Zimbabwe Stock Exchange (ZSE) Top 10 Index ETF also registered a substantial increase of 1770.8 % to ZWL$1.5bn  this week from ZWL$$80.176m reported in January.

ZSE chief executive officer Justin Bgoni told Business Times that retail investors were instrumental in the uptick of the financial instruments.

“…It shows that the Morgan &Co Multi-Sector ETF gaining momentum and will continue to rise,” Bgoni said.

He added: “The addition of channels like ZSE Direct has assisted retail investors with easier access to the stock market hence the increased retail participation.”

The proceeds of the ZSE Direct client will be credited to one’s ZSE Direct wallet on the same trading day after a successful matched and confirmed sell order.

Also, the equities have been bullish, with total market capitalisation breaching the ZWL$1.8 trillion mark this week.

This gives an investor an opportunity to own 10 underlying stocks in one investment in the ETF.

The ZSE Top 10 ETF, whose fund manager is Old Mutual Investment Group, is some form of a derivative because it derives its value from underlying assets. It debuted on ZSE last year.

The Morgan &Co ETF was listed this year.

ETFs can contain many types of investments, including stocks, commodities, bonds, or a mixture of investment types.

Bgoni said a number of retail investors have shown an interest in the bourse on the back of the simplified processes to buy securities.

He said the ZSE remains a viable option as the best preserver of value both against inflation and exchange rate losses.

Bgoni said that  a client  does not have to wait for the settlement cycle of T+3 to receive your sell proceeds, an added convenience brought to the retail investor   by ZSE.

Zimbabwe became the fifth country on the continent to trade the ETF after South Africa, Nigeria, Kenya and Egypt in trading the ETF.