What is a Unit Trust?
Unit Trusts are also known as collective investment schemes. They have grown in popularity in Kenya over the last two decades. There were virtually no unit trusts in 2001 but by 2016, there were 19 unit trust schemes registered by the Capital Markets Authority (CMA).
How do Unit Trusts Work
These investments are the small investor’s answer to diversification without the need to have a large amounts of money to invest. In a unit trust fund, money from many investors is pooled together and invested in a portfolio of money market instruments, bonds, shares and other authorized securities depending on the fund’s objectives. Investors are known as unit holders and the fund earns income by way of interest, dividends and capital gain when the underlying securities increase in value.
An investor invests in a unit trust fund by buying units at the prevailing price. The price is computed on a daily basis. Investors can sell the units back to the fund at the current buying price.
Management fees are charged to manage the fund, usually ranging from 1 – 3% of the fund balance annually. Some unit trusts also charge an initial joining fee of between 0.5 and 5% of the invested amount.
Registered Unit Trusts in Kenya
Unit Trusts in Kenya are legally referred to as Collective Investment Schemes. As at the time of writing, there were 19 collective investment schemes operating in Kenya. The types of funds and minimum investment amounts are listed below:
Name | Type | Minimum Investment |
African Alliance Kenya Unit Trust Scheme | Shilling Fund | Kes 100,000 |
Fixed Income Fund | Kes 100,000 | |
Managed Fund | Kes 100,000 | |
Equity Fund | Kes 100,000 | |
Amana Unit Trust Funds Scheme | Shilling Fund | Kes 10,000 |
Balanced Fund | Kes 10,000 | |
Growth Fund | Kes 10,000 | |
British-American Unit Trust Scheme | Money Market Fund | Kes 250,000 |
Income Fund | Kes 250,000 | |
Balanced Fund | Kes 250,000 | |
Managed Retirement Fund | Kes 250,000 | |
Equity Fund | Kes 250,000 | |
CIC Unit Trust Scheme | Money Market Fund | Kes 5,000 |
Balanced Fund | Kes 5,000 | |
Fixed Income Fund | Kes 5,000 | |
Equity Fund | Kes 5,000 | |
Commercial Bank of Africa Unit Trust Scheme | Money Market Fund | Kes 5,000 |
Equity Fund | Kes 5,000 | |
Diaspora Unit Trust Scheme | Money Market Fund | Data unavailable |
Bond Fund | ||
Equity Fund | ||
Dyer and Blair Unit Trust Scheme | Diversified Fund | Data unavailable |
Bond Fund | ||
Money Market Fund | ||
Equity Fund | ||
Equity Investment Bank Unit Trust Scheme | Money Market Fund | Kes 1,000 |
Balanced Fund | Kes 1,000 | |
FCB Capital Unit Trust Scheme | First Ethical Opportunities Fund | Kes 2,000 |
Genghis Unit Trust Funds | Balanced Fund | Kes 500 |
Money Market Fund | Kes 500 | |
Equity Fund | Kes 500 | |
ICEA Unit Trust Scheme | Money Market Fund | Kes 10,000 |
Equity Fund | Kes 10,000 | |
Growth Fund | Kes 10,000 | |
Bond Fund | Kes 10,000 | |
Madison Asset Unit Trust Funds | Equity Fund | Kes 50,000 |
Balanced Fund | Kes 50,000 | |
Money Market Fund | Kes 50, 000 | |
Nabo Unit Trust Fund (Centum) | Money Market Fund | USD 50,000 |
Balanced Fund | USD 50,000 | |
Fixed Income Fund | USD 50,000 | |
Equity Fund | USD 50,000 | |
Old Mutual Unit Trust Scheme | Equity Fund | Kes 50,000 |
Money Market Fund | Kes 1,000 | |
Balanced Fund | Kes 50,000 | |
East Africa Fund | Kes 50,000 | |
Bond Fund | Kes 50,000 | |
Pan Africa Unit Trust Scheme | Money Market Fund (Pesa Plus Fund) | Kes 2,500 |
Balanced Fund (Chama Plus Fund) | Kes 2,500 | |
Stanlib Unit Trust Scheme (formerly Stanbic) | Money Market Fund | Kes 10,000 |
Bond Fund | Kes 10,000 | |
Equity Fund | Kes 10,000 | |
Balanced Fund | Kes 10,000 | |
Standard Investment Unit Trust Scheme | Equity Growth Fund | Kes 5,000 |
Fixed Income Fund | Kes 20,000 | |
Balanced Fund | Kes 20,000 | |
UAP Investments Unit Trust Scheme | Money Market Fund | Kes 250,000 |
Equity Fund | Kes 250,000 | |
Fixed Income Fund | Kes 250,000 | |
Zimele Unit Trust Scheme | Balanced Fund | Kes 5,000 |
Money Market Fund | Kes 5,000 |
Unit Trust Tips and Warnings
Before deciding to invest in a unit trust, you must pay close attention to the following:
- The investment objective and strategy
- Investment limits
- Current portfolio
- Recent performance
- Past performance i.e. over 12 months
- Specific features and constraints conflicting with your needs or preferences e.g. minimum investment amount or initial charge
- Shareholders, board of directors and key management staff
- Financial strength, track record and expertise
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