eBusiness Weekly
Chipo Chaumba
HARARE – The Zimbabwe Stock Exchange (ZSE) is embarking on an exercise to increase awareness on its soon-to-be-launched Exchange Traded Funds (ETFs).
The local bourse recently announced plans to introduce ETFs as part of its efforts to offer wide investment choices.
The ZSE will conduct an Exchange Traded Funds training workshop in Harare on November 29.
According to the ZSE, the Exchange Traded Funds training event will be attended by investment advisors, dealers, research analysts, stockbrokers, fund managers, investors and any other individual who is interested in learning about ETFs
Said chief executive officer Justin Bgoni:
“We are set to launch the Exchange Traded Funds (ETFs) as part of our efforts to offer investors wide investment choices. It is to this end that we deemed it necessary to offer training to stakeholders. The training will introduce stakeholders to the fundamentals of ETFs, with the aim to ensure that delegates understand the basics of ETFs, the risks and benefits associated with ETFs and most importantly how they will be traded on the exchange.
“We have noticed that it is not enough to launch new products without explaining clearly to the investing public what the benefits are and how they can get involved. ETFs are growing in popularity and this is evidenced by the uptake of ETFs in other markets which include Johannesburg Stock Exchange (JSE), Nigeria Stock Exchange (NSE) and Nairobi Securities Exchange (NSE). We envision a positive uptake of ETFs in the market due to the benefits associated with this investment and as more issuers come on board, they will be free to list different ETFs themes.
“We hope to start with ETFs that are based on shares traded on ZSE. We hope to launch those this year. These can be based on various investment strategies such as Top 10, Exporters. On top of that, you can have some based on gold and platinum.’’
ZSE says it is in continuous engagement with investors, who have indicated that they require alternative investment options to the traditional stocks.
ETFs will increase the number of available investment options for the investment community. ETFs will also allow investors to get exposure to asset classes that are difficult to access directly, for example, commodities.
Retail investors will also benefit from ETFs through the breaking down of large investments into smaller units that can then be bought and sold in the secondary market.
One of the advantages of ETFs is that they tend to be cheaper to invest whilst at the same time providing diversification and liquidity.
Low costs allow quicker build-up of wealth. In addition, ETFs expose normal people to the investing strategies that are usually only available to richer people.
