Omega Ukama 
ZIMBABWE’S largest financial services group, CBZ Holdings (CBZ), is set to launch the country’s third Exchange Traded Fund (ETF) this month, it has been learnt.
Marc Holtzman, chairman of CBZ Holdings Limited.
It comes only a month after Morgan & Co, a local invest bank, launched the country’s second ETF and third derivative to trade on a mainstream exchange.
It also comes as the Securities and Exchange Commission of Zimbabwe (SecZim) had last month hinted that a third ETF was on the way after Morgan & Co launched its fund.
CBZ chairman Marc Holtzman confirmed to The Financial Gazette this week that the group plans to launch a fund before the end of this month.
“Preparations for the ETF are ongoing, and we are targeting to launch this month,” he said.
ETFs are managed funds that track the performance of a specified security, which include, but are not limited to equity indices, commodities and currencies.
Holtzman, however, did not reveal the specifications of CBZ’s prospective fund, saying all the details would be announced in “due course”.
Zimbabwe’s first ETF was introduced in December 2020 when Old Mutual Investment Group Zimbabwe (OMIG) posted seed capital for a fund in the form of scrip weighted according to the Zimbabwe Stock Exchange’s (ZSE) Top Ten Index.
Units of the fund were subsequently listed on the local bourse in January 2021.
On the other hand, Morgan & Co’s fund is actively managed and invests in all sectors.
An actively managed ETF has a manager or team making decisions on the underlying portfolio allocation instead of tracking the performance of a benchmark index, such as is the case with the OMIG fund.
Speaking at the launch of the Morgan & Co fund, which started trading on the ZSE on January 4, SecZim chief executive Tafadzwa Chinamo said his office had refined the ETF approval process after appraising a couple of funds.
“For us as SecZim, and even for the ZSE, this is something that we are learning as we go along.
“But, obviously being a second ETF, it was not as difficult as the first one. And what this means is that subsequent ones are going to be easier,” he said.
Zimbabwe has lagged behind other markets with regards to financial innovation but, things are looking up amid ongoing plans for the introduction of futures and Real Estate Investment Trusts (REITs).
In his 2022 budget statement late last year, Finance minister Mthuli Ncube said the government was looking to establish a mineral commodities exchange on the Zimbabwe Mercantile Exchange, which was launched in August 2021, adding: “The exchange will provide for both spot market and futures market”.
Futures contracts are derivatives that have been in use for decades in other jurisdictions, facilitating standardised legal agreements to buy or sell something at predetermined prices at a specified time in the future, between parties not known to each other.
