Zshares - a Smart component of your share portfolio
Zshares are Exchange Traded Funds (ETFs). This means they are investment instruments that are listed on a stock-exchange and trade like regular shares. Zshares give you convenient and easy access to cost-effective and diversified investment portfolios that are fully transparent and tradable.
Exposure to an entire index via a single security
ETFs are passively managed open-ended investment portfolios which track an index by physically or synthetically acquiring the underlying basket of instruments comprising that index. The indices that an ETF tracks may either be a published index or a bespoke index. ETFs are unit trusts, consisting of participatory interests in a Collective Investment Scheme (“CIS”) or shares in a company. Participatory interests in the ETF are then listed on a recognised stock exchange, thus, providing investors with exposure to the entire index, via a single security. Given that the instruments are listed and trade like shares, ETFs can be short-sold.
Out of the OrdinaryTM ETFs
Zshares are Out of the OrdinaryTM ETFs because they provide theme investing in a way that is easy to understand and consistent. Given that ETFs track an index, Zshares have the advantage of the underlying instruments having a clearly definable trading history. This history allows for robust analysis of trading data, which provides scope for backtesting risk return profiles with confidence. One important conclusion that can be drawn from this is the ability of ETFs to optimise strategic positions in different markets or to provide theme investing. Assets are allocated based on empirical research, tested diversification, and are maintained through periodic rebalancing.
Housed within a Collective Investment Scheme
Zshares are unit trust funds, and are therefore subject to the same regulations as unit trust funds. They are essentially unit trusts backed by baskets of securities designed to track indices. However, unlike a unit trust, where you can only buy or sell once a day, based on the closing Net-Asset Value (NAV) calculated at the end of each trading day, Zshares trade just like any share on a stock exchange and as such price movements depend on market forces. Zshares can be bought and sold via a stock broker just like ordinary shares. This means that you have full transparency in terms of pricing. Zshares also provide full transparency in terms of the underlying, in that the components of the fund are disclosed every trading day as opposed to traditional unit trust funds that report their holdings periodically.
Low expense ratios boost net returns
The passive financial investment strategy is a profitable investment strategy. Zshares have some of the lowest expense ratios among registered investment products. This low cost advantage has the effect of boosting net returns.
The combination of instant diversification, low cost and flexibility that these Zshares offer, makes these instruments one of the most useful innovations and attractive pieces of financial engineering to date. By owning a Zshare, the diversification advantages of an index are achieved with the same degree of flexibility as a stock. And given this tradability, your exposure can be adjusted as soon as your views change.
