Old Mutual Top Ten ETF registers first loss

Old Mutual Top Ten ETF (the Fund), experienced a tough year in 2022 as it closed the financial year with its first ever net loss.

The Fund recorded an inflation adjusted net loss attributable to unitholders of $1 296 144 073 for the year from a net income of $1 139 790 309 in 2021.

Fund manager, Marjorie Mayida, said the ETF still qualifies to operate as a going concern and will continue to operate as such.

She said: “The Fund Manager has assessed the ability of the Fund to continue operating as a going concern and believe that the preparation of financial statements using the going concern assumption is still appropriate.”

This comes after the Fund recorded an investment loss of $1,27 billion in 2022, down from an investment income of $1,5 billion in the prior year. It was driven by a fair value loss of $1,47 billion experienced during the year, which is a stark contrast from a fair value gain of $1,36 billion in 2021.

It is despite having foreign exchange gains of $4,7 million from the sale of VFEX listed shares in 2022 which was not realised in 2021. Sale of shares generated income worth $166 million in the period under review, which was 66 percent higher than the previous period.

Dividend income fell to $24,2 from $33,77 million in 2021, due to half of the basket not declaring any dividend in the period under review. In 2021, all ten constituents declared a dividend.

The Fund now has seven constituents listed on the ZSE and three listed on the VFEX in Innscor, Simbisa and National Foods.

An ETF is a basket of securities that can be bought or sold on the stock market the same way traditional stocks are traded.

The coming of ETF s on the ZSE has broadened the investment space on the ZSE, which has previously largely been known as a marketplace for stocks.

According to the ZSE board chairperson, Caroline Sandura, ETFs now offer retail investors more latitude to spread risk and diversify investment options.-ebusinessweekly