Datvest not reconstituting ETF basket

Matilda Nyathi, Group Executive, Marketing and Corporate Affairs
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CBZ Holdings says ZSE-listed companies which are part of its consumer staples basket migrating to the Victoria Falls Stock Exchange (VFEX) will present an opportunity to add USD-denominated assets for its exchange-traded fund (ETF).

The Datvest Modified Consumer Staples Exchange Traded Fund which was listed on the ZSE in March this year became the third listed ETF, following the listing of the Old Mutual Zimbabwe Top Ten ETF and Morgan & Co Multi-Sector Exchange Traded Fund.

To date, there are now five ETFs after the coming on board of another Morgan and Co ETF, the Morgan & Co Made in Zimbabwe Exchange Traded Fund and the Cass Saddle Agriculture Exchange Traded Fund.

The Datvest ETF index is constituted by companies within the consumer staples. However, Simbisa Holdings and National Foods which are part of the Datvest ETF are migrating to the USD-denominated exchange VFEX.

Matilda Nyathi, Group Executive, Marketing and Corporate Affairs said the companies will remain in the consumer staples sector, as such will not be reconstituting the basket.

“The listing on VFEX presents an opportunity to add USD-denominated assets to the portfolio, in the process introducing currency diversification which will enhance the robustness and long-term performance of the portfolio,” she said in emailed responses.

She added, “We anticipate the investee companies that are going to list on VFEX to generate incremental shareholder value through the exploitation of the various incentives attached to VFEX.”

Since the launch of VFEX in 2020, three counters have delisted from ZSE namely SeedCo International Limited, Padenga Holdings and Bindura Nickel Corporation.

Currently, Simbisa and National Foods are at different stages of the migration and Getbucks Microfinance Bank is trading under a cautionary statement due to their intent to delist from ZSE and move their shares to VFEX.

VFEX is providing favorable tax incentives for investors enabling the optimization of returns and these include zero capital gains tax on VFEX resident and non-resident investors and a 5 percent dividend withholding tax for foreign investors.

However, Nyathi said the Datvest ETF will continue to trade on the ZSE and the companies listed on VFEX will be valued at the prevailing exchange rates for the purposes of net asset value (NAV) calculations and fund administration.

Government has said capital markets are part of the country’s economic development agenda hence increased market products speak to the government’s unrelenting efforts to continuously open up the economy. – Business Weekly