VFEX lists first Exchange Traded Fund

THE Victoria Falls (VFEX) has broken new ground with the listing of the First Mutual Wealth Gold Exchange Traded Fund (ETF), the first ETF ever to be admitted to the US dollar-denominated bourse.

The gold-backed instrument, which listed last Friday, is also the 21st counter to join the VFEX, underscoring the exchange’s steady growth, deepening liquidity and ongoing product diversification.

Presiding over the listing ceremony in Victoria Falls, the Deputy Minister of Finance, Economic Development and Investment Promotion, Kudakwashe Mnangagwa, hailed the debut as a strategic signal to the international investment community that the nation’s markets are maturing, regulatory frameworks are strengthening, and the economy is ready to participate meaningfully in the global financial ecosystem.

“Every new listing on the VFEX is more than a milestone; it is proof that we are building capital markets fit for purpose, markets that can mobilise lasting capital, fuel infrastructure, and drive the transformation of our economy,” said Deputy Minister Mnangagwa.

The FMWG ETF is designed to track the performance of gold-linked assets listed on the Johannesburg Stock Exchange (JSE).

Its portfolio comprises a 50 percent allocation to the 1nvest Gold ETF and equal 12.5 percent stakes in four blue-chip gold-mining equities, including Gold Fields, AngloGold Ashanti, Harmony Gold and DRD Gold.

The product offers investors a regulated, liquid and transparent way to gain exposure to international gold prices without the logistics and security costs of holding physical bullion.

First Mutual Wealth general manager, Mr Thomas Mutswiti, explained the objectives behind the product.

“We didn’t want to have direct physical gold holdings, which can present complications. Instead, this approach gives investors access to the upside potential of gold, particularly in times of market stress, when gold prices typically rise due to its safe-haven status,” he said.

Mr Mutswiti said the fund had been in development for some time, but regulatory processes delayed its launch.

The ETF has been structured as an open-ended, US dollar-denominated vehicle with an initial net asset value of US$10 million represented by 100 million units priced at US$0.10 each.

A notable feature of the subscription phase was the overwhelming response from ordinary investors.

Although the VFEX had targeted a 30 percent public spread, official figures released on Friday showed that retail investors accounted for more than 60 percent of total subscriptions, significantly exceeding expectations.

Zimbabwe Stock Exchange group chairperson, Mrs Caroline Sandura, described the ETF listing as a defining moment for the exchange, for Zimbabwe’s capital markets and for the broader financial ecosystem.

“By listing the FMW Gold ETF, VFEX joins global exchanges offering modern, efficient instruments that meet the evolving needs of investors,” said Mrs Sandura.

She emphasised that product diversification is critical for the long-term sustainability of any exchange, and that the addition of an ETF significantly broadens the VFEX’s value proposition.

The listing comes at a time when global gold prices have surged more than 60 percent over the past year, driven by heightened economic uncertainty, inflationary pressures and increased central bank demand for safe haven assets.

The Deputy Minister noted that in such an environment, gold has reaffirmed its position as a safe-haven asset, with global central bank demand for gold reaching record levels in recent years.

The successful listing could pave the way for more commodity-linked and offshore-backed products on the VFEX, strengthening Zimbabwe’s position as a regional investment hub and reinforcing the Government’s message that the country is open for business.

Trading in the FMWG ETF units is available through all VFEX-registered stockbrokers, with a minimum investment threshold of US$100 for retail clients and US$1,000 for institutional investors.