Smartvest High Income Fund (SHIF), a newly listed unit trust, is seeking to raise up to US$10 million as it moves to deliver a high level income and moderate capital growth over time for investors.
The Securities and Exchange Commission of Zimbabwe recently approved SHIFs’ listing on the Financial Securities Exchange (Finsec) Mutual Funds Board.
SHIF is the product of a collaboration between Finsec, Lincoln Capital and Smartvest Wealth Managers and the fund is denominated in US dollars, offering a fixed-income type of security to investors
Introducing SHIF during a recent webinar, Smartvest CEO Peter Kadzere and Lincoln Capital MD Elimon Taundi said ithe first tranche of one million units will be at US$1 each.
“SHIF seeks to raise up to US$10 million. Issuing units in the Smartvest High Income Fund are in a unit issuance programme,” Smartvest said.
“SHIF seeks to deliver a high level of income and moderate capital growth over time for investors.
“The fund will invest in short-term secured money market instruments backed by quality loan portfolios to SMEs administered by regulated and licensed financial institutions.”
The duo said while the overall Zimbabwean economy was facing challenges, micro, small and medium enterprises (MSMEs) were a vital source of employment and gross domestic product(GDP).
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They said SHIF was created specifically to address the critical need for improved financial services for this sector.
The Smartvest duo also added that while MSMEs are vital drivers of job creation and economic growth, they often lack access to traditional funding due to limited credit history or high perceived risk.
SHIFs’ salient features include the fact that units will be backed by secured notes.
“The secured notes are high-quality loan-based securities created through securitisation of loan portfolios. Loans are secured by immovable property with registered mortgage bonds,” Smartvest said.
Meanwhile, Finsec business development manager Victor Mukara said despite various efforts made by financial services players to promote financial inclusion by addressing the knowledge gap on investment products, the uptake in unit trusts by investors was still low.
“Unit trusts are required to publish regular reports on their performance,” Mukara said.
“These reports may not provide investors with a complete picture of the underlying assets in the fund.
“In addition, some unit trusts may invest in complex financial instruments that may be difficult for investors to understand.
“Since the industry has shrunk it is very expensive to market therefore these mutual funds lack visibility and cannot attract capital even where superior returns are available.”
He said unit trusts are only available through over-the-counter transactions, making it difficult for many to gain access.
Those living abroad, he said, are excluded from this option as there are no available platforms for trading and investing in these unit trusts.
