Growth of collective investment schemes show market resilience, CBZ
CBZ Custodial Services says the growth of collective investment schemes (CIS) is manifestation of the growing reliance on capital markets and on institutional investors as opposed to on – balance sheet lending by banks in financial intermediation.
A collective investment scheme is run by an entity that allows investors to pool their money and invest in the pooled funds, rather than buying securities directly as individuals.
Zimbabwe’s capital markets have in recent times seen the growth of CIS through unit trusts, exchange traded funds, and reits.
CBZ Head of Custodial Services, Simbiso Musa, at the launch of the company’s Trustee Services last Friday, said intermediation through capital markets has the potential to promote greater efficiency in the economy provided that a sound institutional, legal and regulatory framework is in place.
“According to a general survey carried out by an independent arm “safety of one`s investment was ranked the top consideration when choosing an investment,” she said.
Musa said safe investments refer to investments whereby the chances of an investor losing their principal is very low; and that is the main role of a trustee at all the time- oversight to ensure the fund manager invests in the fund assets with the necessary prudence and due care.
“In this regard the role of the Trustee as a critical party in the governance of CIS cannot be over-emphasised,” she said.
CBZ Custodial Services is regulated by the Securities Exchange Commission of Zimbabwe (SECZ) and was established in terms of the Securities Act (Chapter 24:25).
CBZ Custodial Services provides custody of electronic and physical instruments on behalf of investors such as, bonds, share certificates, title deeds, educational certificates, wills and any other high valued documents as required by our clients.
Musa said the Trustee Services represents a function in which the Custodial Services unit commits to fully serve the markets when it comes to administration of investments.
“Therefore now we are satisfied and confident that we can fully offer the entire investment administration package under one roof.”
She said the unit’s vision- is premised on the growth opportunities seen in the country’s capital markets.
According to SecZim, the CBZ Bank Trustee for CIS brings the total number of registered trustees to four.
“This year alone, we have witnessed the registration of nineteen different players in the capital markets.
“Of these 19 players, 5 are collective investment schemes. The total number of Collective Investment Schemes now stands at 65 with funds under management of $55,6 billion,” said SecZim.
At the end of third quarter 2022, the number of unitholders in these funds stood at 80276 hence there is therefore a clear need for more trustee services and CBZ Bank Trustee services has come at the opportune moment.-ebusinessweekly
