An exchange traded fund, or ETF, is a type of pooled investment vehicle that tracks a particular index, sector, commodity, or other asset class. ETFs let you invest in lots of securities all at once, and they often have lower fees than other types of funds. These instruments are typically more liquid than the underlying stocks. ETFs can be managed actively or passively. An actively managed ETF is a form of ETF that has a manager making decisions on the underlying portfolio allocation, while passively managed ETFs mimic the composition of an index as best as possible.
Advantages of ETFs
Easy to trade – You can buy and sell any time of the day, unlike most mutual funds that trade at the end of the day.
Transparency – Most ETFs are required to publish their holdings daily.
More tax efficient – ETFs typically generate a lower level of capital gain distributions relative to actively managed mutual funds.
The Morgan & Co Multi-Sector ETF is Zimbabwe’s first actively managed exchanged traded fund. ETFs are financial instruments that pool stocks with common characteristics and trade on a public exchange. ETFs can be found along the spectrum of active and passive investing styles. The Morgan & Co Multi-Sector ETF is an actively managed ETF with the goal of beating the ZSE All Share while boasting a low-cost structure. The ETF aims to earn alpha for investors by taking long positions in fundamentally undervalued sectors. The ETF is benchmarked against the ZSE All Share Index and is readily available on C-Trade and ZSE.