OLD Mutual Investment Group Zimbabwe (Private) Limited (OMIG) has announced a $1,29 billion loss for its Old Mutual Zimbabwe Stock Exchange (ZSE) Top Ten Exchange Traded Fund last year, in which the local currency significantly depreciated.
During the year ended December 31, 2022, the OMIG exchange traded fund (ETF) declined to a loss-making position from a 2021 comparative of $1,13 billion investment gain.
This came as the local currency fell to $684,33, against the greenback, at the end of last year from $108,66 at the end of 2021.
OMIG, an investment subsidiary of Old Mutual Zimbabwe, is the fund manager of the ETF, which was the first security of its kind to be listed on the ZSE.
“The operating results and financial position of the fund are set out in the statement of comprehensive income, statement of financial position, statement of changes in net assets, statement of cash flows and the accompanying notes,” OMIG said in a statement attached to the financial performance of the ETF.
“The fund recorded an inflation adjusted net loss attributable to unitholders of $1 296 144 073 for the year (2021: net income of $1 139 790 309).”
An investor who holds one or more units in a real estate investment trust, ETF or master limited partnership is known as a unit holder.
“The fund is an investment vehicle for various clients whose funds are pooled together with the objective to provide investment results that, before fees and expenses; closely correspond to the performance of ZSE Top Ten Index; and provides the unit holder with a steady growth of income and capital in the medium-to long-term period,” OMIG said.
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One unit represents one share or fractional interest, while the trust's actions are governed by the trust declaration, which grants certain rights to unitholders.
Last year, the subscription price into the OMIG ETF declined in US dollar terms to just US$0,009 by the end of the year from a 2021 comparative of US$0,04.
In terms of market cap, that translated to a loss of US$1,97 million.
“The fund manager has assessed the ability of the fund to continue operating as a going concern and believes that the preparation of financial statements using the going concern assumption is still appropriate,” OMIG said.
The decline of the Zimbabwe dollar saw the ETF paying a lower dividend to investors of $24,21 million at the end of the period under review, down 28,03% from a 2021 comparative of $33,77 million.
The local currency’s depreciation led to fair value loss on equity investment for the OMIG ETF of $1,46 billion from a 2021 comparative gain of $1,36 billion.
