The ZSE celebrates more good news this month with the listing of its 3rd Exchange Traded Fund courtesy of Datvest (of CBZ Holdings) and their Modified Consumer Staples Index Exchange Traded Fund. As FinX reported late last year two new ETFs were coming to the ZSE and in the first quarter, both will be delivered. The much anticipated ETF listing will provide a product that is focused on consumer stocks on the ZSE.
CBZ needs no introduction as its footprint on the financial landscape of Zimbabwe is nothing short of huge. Their investment and asset management arm Datvest will become the third ETF issuer in Zimbabwe. The ETF is expected to list on the 3rd of March 2022. Looking at its predecessors the Old Mutual ZSE Top Ten ETF (OMTT) which is up 1000% since its 4 January 2021 introduction and The Morgan and Co Multi-Sector Exchange Traded Fund (MCMS) up 44% since its introduction in January 2022 you would be justified if you expect good things to come from the new kid on the block.
The ZSE’s consumer staples index has performed consistently well with consumer stocks doing very well on the Zimbabwe Stock for at the very least the last few years. It’s reasonable to expect that an ETF based on this index will perform well. The MCSI will however be a managed fund rather than an Index Fund. That is to say, Datvest will choose and modify the composition of the fund. So some asset management muscles are expected to be flexed here. The prospectus goes to great lengths to explain the approach to the fund and issues around the management of the fund and it is recommended reading for those interested in the ETF.
As published in the prospectus the fund will be made up of the following counters
Early days but we can see some duplication with Funds like the OMTT ETF, 5 of the 10 counters (Delta, National Foods, Innscor, Hippo and Simbisa) are currently in the ZSE Top Ten index. Of the remaining 5 counters 4 fall within the top 15 (Ok Zimbabwe, Miekles, TSL and AfDis). Another interesting point is that the ZSE has two consumer segments; Consumer Goods and Consumer Services. Miekles and Innscor fall under Industrial as they are well-diversified conglomerates.
The performance of the Modified Consumer Staples ETF can be compared to the OMTT, MCMS and the Consumer Staples index going forward. All eyes will be on the ZSE from the 3rd of March as we anticipate the latest ETF listing.