The first ZSE listed Exchange Traded Fund (ETF), The Old Mutual ZSE Top 10 ETF (OMTT) listed on the 4th of January 2021. Now Just over 1 year and a half down the line the ZSE welcomes its 5th ETF as Cass Saddle Asset Management will list the Cass Saddle Agriculture ETF today, the 15th of July 2022. Morgan and Co Listed their Multi-Sector staples ETF (MCMS) in 2021 and added their Made in Zimbabwe ETF (MIZ) a month ago. CBZ’s Datvest Asset Management listed the Modified Consumer Staples ETF (DMCS) in March of 2022. ETFs have proved very popular since their introduction and Cass Saddle will add a much-awaited ETF.
ETFs popular in Zimbabwe
ETFs have been a big hit with ZSE investors seeking more options than just buying their favourite counters. The Old Mutual Top Ten ETF initially launched with 40 million units and has increased the units twice to sit at over 140 million units. Both the Morgan & Co ETFs and the Datvest ETF have also proved popular on the market. All funds (DMCS +89.85%, MCMS +160% and OMTT +117.30%) that were with us at the start of the year are firmly outperforming the ZSE All Share index (+51.85%) year to date. The MIZ ETF is up 25% after 1 month of listing.
Cass Saddle Asset Management
Cass Saddle is an agri-focused asset management company that is licensed by the Securities and Exchange Commission of Zimbabwe (SECZim). The asset manager offers Institutional Fund Management, Individual Wealth Management, Investment services and advisory. Their website lists products including REITs, Index funds and various agricultural investment products. They will work with experienced campaigner CABS as their custodial and trustee for the Agricultural ETF. Ingenium capital will play the role of sponsoring broker while Morgan & Co will be the ETF market maker.
Cass Saddle Agriculture ETF (CSAG)
The ETF will feature agriculture-related listed companies on the ZSE and launch with 36,199,404 units at $1 per unit. The prospectus outlines the counters and their weights to be included (image below). The Agriculture ETF will be an index fund, making it the second index fund on the ZSE after the OMTT. This means the fund will replicate the ZSE Agriculture Index as it stands and will be reviewed quarterly in line with the ZSE policy to review index constituents quarterly. The fund will be launched a holding of cash at 3% of the fund. The fund will distribute dividends paid by shares held in the fund to holders of the ETF. Fees for ETF holders are expected at 0.67% per annum plus a creation fee of US$100.
All eyes will be on the ZSE as it opens later today to welcome the 5th ETF to the market. There is a real demand for both ETFs and more index funds in Zimbabwe. In case you’re wondering the ZSE agricultural index is up 51.57% including Tanganda (which was unbundled by Miekles on the 3rd of February 2022) and 32.72% excluding Tanganda for the year to date.