There are several ways through which Kenyans can invest without too much risk. One of the ways that almost guarantee a return on investment is through unit trusts. These are vehicles that are used to pool resources together by different investors for investment in channels such as stocks. They’re managed collectively by a fund manager who is licensed by the Capital markets Authority (CMA).
They are a short-term investment suitable for an investor who is averse to risk (losing money). They give better returns than interest on bank savings accounts or fixed deposit accounts. Last year, some unit trusts offered up to over 18 percent in returns, which was higher than T-bills.
Why unit trusts:
Interestingly, once you invest in unit trusts, the fund manager will offer you an investment cushion from which you will be able to make money without the strain of physically tracking your investment portfolio on a daily basis.
Additionally, the interest you will gain will be much higher than the one offered by banks. This means that unit trusts will be a better channel for saving unlike the traditionally fixed deposit account offered by banks. For example, if for you have invested Sh100,000 in a fund that reports a daily rate of 9 percent, your investment will give you a monthly interest of Sh. 741 compared to the Sh. 150 bank interest that a similar amount may give you.
How to start:
If you want to buy unit trusts, you’ll need to go to a licensed fund manager. There are a host of licensed fund managers in Kenya, and you will need to sift through them with a keen eye to establish who is most suitable for you. One of the most efficient fund managers that you can go for is Apollo Asset Management. This fund manager was licensed in 2016 by the CMA to run a unit trusts scheme. This license allowed the firm to sell the unit trust funds through money market, balanced, equity, East Africa, Aggressive growth and bond funds, as well as an Islamic-finance compliant fund.
The asset managers, with over Sh. 10.2 billion in assets under management at the time, launched three money market funds named Apollo Balanced fund, Apollo Equity Fund, and Apollo Money Market Fund.
The big question, though, is what do these unit trust funds offer and how can you make money from them? Let us explore:
Available unit trusts for you
To begin with, unit trusts are offered in various funds such as Apollo Balanced fund, Apollo Equity Fund, and Apollo Money Market Fund. “Unit trusts that cater for short-term objectives are called Money Market Funds or Income Funds and they are invested in interest-bearing securities such as treasury bills, treasury bonds, fixed deposits, among others. Returns are in the form of interest income, and they carry low risk,” explains Apollo Asset Management chief executive officer Fred Mburu.
The equity fund, on one hand, invests in securities and is best suited for long-term investors looking to invest for periods of over five years. The main investment in this fund is predominately in shares of companies, showing strong potential for growth, that is listed on the Nairobi Securities Exchange.
On the other hand, the Balanced Fund is a stable and less-risky investment. It essentially invests in assets that offer income, domestic money market, and offshore deposits which gain from the higher returns offered by countries outside Kenya such as Switzerland, Mauritius and Cayman Islands. It will also spread its investments among ordinary shares, preferred stock, high yielding bonds and bank deposits.
TO INVEST, CALL APOLLO ASSET MANAGEMENT ON: 020 286 2000 or 0709 912 777.
Quick takeaway: It is important for you to bear in mind that the Money Market Fund is the best option for new and small investors. It is low-risk, invests in short-term securities, and has minimum balances, unlike the other options.
Amounts you need to invest in these unit trusts:
Equity Fund: To invest in an equity fund such as the Apollo Equity Fund, you will only need a minimum initial investment of Sh. 10,000 with additional top-ups of Sh. 5,000 which you can make at your own pace. “You can make these top-ups by making direct cash deposits, direct debit order or standing order or even by cheque,” says Mr. Mburu.
Money Market Fund: You will only need a minimum lump sum investment of Sh. 10,000. From this amount, you can then make voluntary top-ups of Sh. 2,000 through the same means as you would make in an Equity Fund.
Balanced Fund: The minimum initial investment you will need is Sh. 10,000. Thereafter, you can make top-ups of Sh. 5,000 and above.
CLICK HERE TO GET IN TOUCH WITH APOLLO ASSET MANAGEMENT!
YOU MAY ALSO CALL THEM ON 020 286 2000 or  0709 912 777 TO START INVESTING!