ZIMBABWE – The Zimbabwe Stock Exchange (ZSE) has listed an agricultural-based Exchange Traded Fund (ETF) dubbed Cass Saddle Asset Management Agriculture Exchange Traded Fund.
The EFT, according to reports by Herald, which is the fifth by the local bourse took off with seed capital of ZW$36 199 404 (US$90,000) comprising 36 199 404 units and additional investments will be used to purchase shares on the market as addition to the portfolio.
The Cass Saddle ETF will track all the counters in the agricultural sector listed on the ZSE. Its custodia will be CABS Custodial Services while CABS Trustee Services will be the trustee.
Settlement of trades in the units will be done in electronic format in accordance with the settlement modalities approved by the Zimbabwe Stock Exchange.
The first 10 counters of the index are National Foods with a weight of 28 percent, BAT 15 percent, Tanganda 12 percent, Hippo Valley 11 percent, Seedco 9 percent, TSL 9 percent, CFI 8 percent Dairibord 3 percent, Zimplow and Ariston 1 percent respectively and Cash 3 percent.
“The agro ETF will be listed on the ZSE and additional investments will be used to purchase shares on the market as addition to the portfolio.
“Investors can deliver a basket of stocks in the exact weight of the fund through an authorized participant or buy units in the ETF through a registered stock broker whenever they wish to invest,” read part of the prospectors released ahead of the listing.
Launching the ETF, ZSE chairperson Caroline Sandura said the agriculture sector was well documented as being the pillar of the Zimbabwean economy, contributing an average of 10% to gross domestic product over the past five years and slightly over US$1 billion in export receipts in 2021.
“The agriculture sector also supplies up to 60% of the raw materials required by industry. It is, therefore, commendable that Cass Saddle Asset Management picked this important sector for their ETF,” she said.
This is the fourth ETF listing this year on ZSE and the fifth listing including the relist of Tanganda which took place in February this year.
Zimbabwe’s Lands, Agriculture, Fisheries, Water and Rural Development deputy minister Davis Marapira who was the guest of honour said innovations such as the Cass Saddle ETF were key in improving access to capital from investment into the various value chains in the agricultural sector.
Mharapira added that the listing of the agriculture ETF represented the marriage between agriculture and the financial markets to promote agriculture as a business in line with the agriculture and food systems transformation strategy.
“For this reason, we celebrate all efforts by our financial market players in line with this vision of improving fortunes through the agricultural economy.
“It is pleasing to note there are many reasons why it is important but chief among them is the transparency, corporate governance and improved credit worthiness, this is the solution for channelling institutional funds into agriculture,” he said.
The EFT prospectus shows that it will be passively managed, thereby mitigating the element of “managerial risk” that can make choosing the right fund difficult.