Old Mutual lays out capital markets plan

OLD Mutual Zimbabwe (OMZ) has released a prospectus for its “Old Mutual Zimbabwe Stock Exchange Top-Ten Exchange Traded Fund Trust”, which tracks the performance of the Zimbabwe Stock Exchange (ZSE) Top-10 Index.

The ZSE Top-10 Index represents the top counters by market capitalisation on the main bourse.

“This prospectus relates to information to prospective investors of the establishment of an Exchange Traded Fund by Old Mutual Investment Group Zimbabwe (Private) Limited, whose objective is to give returns that track the Zimbabwe Stock Exchange Top-Ten Index,” reads part of the prospectus.

“Prospective purchasers of any exchange traded funds should ensure that they understand fully the nature of the exchange traded fund and the extent of their exposure to risks and that they consider the suitability of the exchange traded fund as an investment in the light of their own circumstances and financial position.”

The ZSE Top-10 Index as of Monday included CBZ Holdings Limited with a market capitalisation of ZW$22 678 645 803 (about US$280 million), Delta Corporation Limited at ZW$28 286 532 772 (about US$349 million) and Cassava Smartech Zimbabwe Limited at ZW$15 164 459 601 (about US$187 million).

Others included Innscor Africa Limited, FBC Holdings Limited, Econet Wireless Zimbabwe Limited, Padenga Holdings Limited and Hippo Valley Estates.

Collectively, the ZSE Top-10 Index was valued at ZW$150 416 189 363 (about US$2 billion), which makes up 14% of the gross domestic product.

According to American financial and economic literacy website, Investopedia, an exchange traded fund otherwise known as an ETF is a type of security that involves a collection of securities such as stocks.

ETFs often track an underlying index, although they can invest in any number of industry sectors or use various strategies.

ETFs are in many ways similar to mutual funds. However, they are listed on exchanges and ETF shares trade throughout the day just like ordinary stock.