Omega Ukama 
OLD Mutual Investment Group Zimbabwe (OM)’s Exchange Traded Fund (ETF) gained 93 percent during the first quarter of 2021, outpacing its benchmark — the Zimbabwe Stock Exchange (ZSE) Top Ten Index — which put on 57 percent during the same period.
An ETF is a security that tracks another asset, index, sector or commodity, but which can be purchased or sold on an exchange the same as a regular stock.
For a number of reasons, ETFs rarely ever track the underlying perfectly and the difference between the performance of the security and the yardstick is known as a tracking difference.
Early investors in the OM security will be very happy with its performance during the quarter as ETFs typically underperform their indexes by a small margin, with a positive tracking difference of 36 percent virtually unheard of.
Analysts, however, say indications are that the difference is narrowing. “There was a hype of demand as the OM ETF was introduced, pushing up price ahead of fundamentals and the market.
“It seems the ETF has started re-correcting to the market,” Mutandani Makuyana, Invictus Securities’ head of research told The Financial Gazette last week.
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