Each member in a Chama would like to see a change as they go out to invest their money. Some groups hold back their money out of fear they may lose as they search for investment options. For a group that has not identified what it needs to invest in, a Unit trust fund is the best short-term option as they agree on investment options.
Unit trusts are money vehicles’ that enable investors to pool their money together with the same objective. Money is managed by fund managers who make decisions on behalf of the group. Money is invested in several portfolios such as shares, bonds and money market instruments or other authorized securities to achieve the objectives of the funds.
Essentially there are two types of unit trusts: money market funds and market equity funds.
Unit trusts in Kenya are operated by generally by the leading insurance companies, so your Chama members can be sure that the money the group has invested is in safe hands. But there is the need to know the difference between a unit fund and an insurance policy!
Investors in unit trusts can access a broader range of securities than they could when investing on their own.
There is ease in buying and selling the units. In comparison to investing directly in shares of companies, where prices and opportunities to transact depend on the supply and demand at the time of investment.
Fund managers can trade in investment products such as government and corporate bonds, which may be restricted to institutional investors. Some of these products are purchased in bulk, which limits the individual investor even when he has the opportunity.
There are a variety of firms that offer the unit trust investment. The most pronounced are Old Mutual, Stanbic Investments, Britam ,CIC, African Alliance Kenya, Commercial Bank of Africa, ICEA, Suntra Unit Trust and Zimelea.
This post was written by Anne Oyoo
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