Zimbabwean asset manager launches gold coin unit trust

Bard CEO Senziwani Sikhosana
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ASSET management firm, Bard Santner Investors has launched a gold coin unit trust to drive financial inclusion in Zimbabwe.

The asset, called Bard Santner Gold Coin Unit Trust, is also meant to reignite a savings culture in the country, according to a statement released by the firm.

Savings in Zimbabwe have generally been affected by episodes of inflationary rages since 2000, which eroded investor confidence in formal markets.

Zimbabwe’s annual inflation closed 2022 at 243%, remaining the highest such rate in the world.

But the firm said it was rolling out a product with capacity to defend investors against high inflation and currency volatility.

“Bard Santner Gold Coin Unit Trust… offers investors an inflation-proof asset denominated in hard currency,” the firm said after the launch.

“The instrument is designed to ensure financial inclusion and contribute to resuscitating a savings culture in Zimbabwe. The underlying asset of the unit trust is the Mosi-oa-Tunya Gold Coin issued by the Reserve Bank of Zimbabwe (RBZ),” Bard noted.

“Gold is a defensive asset, which makes it a good asset to hold so as to withstand market and exchange rate volatility so prevalent in the world in these times. Global uncertainties brought about by wars and pandemics have seen the gold price increase by 50% between 2017 and 2022 while global production has shrunk some 10% over the same period,” the statement said.

In July last year, the RBZ introduced gold coins as an investment option in Zimbabwe under its aggressive mop up operation that has helped it contain inflation.

After introducing higher denomination coins mid year, the central bank followed through with smaller denominations in November to give small scale investors room to participate.

More than 11 000 coins worth $11,5 billion have been sold.

Under its initiative, Bard said it will be the fund manager responsible for investing unit holder funds, while mortgage lender, CABS will be the trustee, which will keep the fund assets in custody on behalf of unit holders.

The minimum investment will be US$120, according to the statement.

It said alternatively, investors can invest in monthly instalments of US$15 or the equivalent in Zimbabwe dollars, at the bank rate.

“Zimbabwe has a severe shortage of investment funds which has constrained growth,” Bard said in the statement.

“There is need to address this problem by ensuring a certain level of short-term, medium-term and long-term savings to meet the investment needs of the economy. Long-term savings are more suitable for investments hence government and private sector, including Bard Investors, should try to drive savings through various initiatives,” the statement added. – News Day