What is a Unit Trust?
A unit trust is a unique and excellent way to accumulate wealth. It is a pool of savings by unit holders (Members). This pool is invested by professionals in selected shares, cash, and interest-bearing instrument
What Should I consider before I invest in a Unit Trust?
Before considering investing into a unit trust, the following should be ascertained:
- Your risk profile;
- Your time horizon for the investment; and
- Your financial goals – immediate, short, Medium and Long-term
- Liquidity- Whether you require regular income from the investment or purely looking for capital growth.
Unit trusts are considered appropriate investment vehicles for individual investors wanting to gain long-term exposure to financial markets.
However, the value of a unit trust depends on the value of the underlying assets within the portfolio. Therefore, the value of the unit trust will fluctuate as the values of the underlying assets fluctuate.
Types of funds under unit trusts
- Money market fund
- Equity fund
- Fixed income fund
- Balanced fund.
Money market fund
The Money Market fund is a low-risk fund which invests in diversified near cash holdings, fixed deposits and high yielding interest-bearing instruments in the Kenyan market.
This fund is:
- Conservative.
- A safe parking for an investor with a low-risk appetite – preservation of capital.
- Ideal during times of stock market turbulence.
The current rate of return is 10.47% P.A and will move with market dynamics
Equity fund
The Equity fund invests in professionally selected securities listed in the Nairobi stock exchange. The fund is suitable for the investor, who is seeking medium to long-term growth through capital gains from the investments.
This fund is ideal for the institutions:
- Seeking capital growth
- Potential to beat inflation
- With a long term focus on investment
- Ready to take some amount of risk- due to volatility in the stock market
1 Returns on the Equity Fund
Returns consist of dividends, capital gains and an interest portion. Dividend distributions are done twice a year in June and December. We recommend reinvestment of dividends into the funds to investor in order to benefit from compounded growth.
- The recommended investment term is 4-7 years; regardless an investor can withdraw their investment at any time at the prevailing prices. At withdrawal it is important for the investor to consider their investment goal and fund values. Remember you only realize a gain or loss when you liquidate your investment.
- The minimum investment amount is kshs.5, 000 and minimum top ups of kshs.1000. It is always recommended that you invest in lump sum amounts to benefit from the funds.
- The fund has an initial fee 5%.
Please note:
The prices of the equity fund change on a daily basis depending on the performance of the underlying assets held moving up or down due to the impact of market forces.
Fixed income fund
The Fixed Income Fund is a moderate to medium risk fund that invests in a well-diversified portfolio of fixed income securities issued by the Kenyan government and corporations. The fund is suitable for investors seeking a reasonable level of current income and steady growth of their capital.
Returns on the Fixed Income Fund
Returns consist of interest from the bonds reinvested quarterly. It is recommended that the income be reinvested into the fund so as to maximize investment returns through compounded growth. It is recommended that the funds be invested for at least 2 years to 3 years to get a good return.
Projected returns of the Fixed Income Fund are 10%-12% per annum.
Investment Performance
Assuming an average return of 11% for a period of 1 year, an investment of Kshs 10M would generate a 1.15M inform of cash above investment.
Fees
- Minimum investment amount is Kshs. 5,000. Minimum additional amount is Kshs. 1,000.
- There is 2.5% initial on the fixed income fund
- Access to your money is when required with a short notice of 5working days.
Balanced fund
The objective of this fund is to provide medium return to the investor with a medium or an average outlook to risk. It is ideal for investors looking for a mixture of safety, income and capital appreciation while proving the investors with a fund that combines growth and income objectives by investing in the stocks of listed companies for growth and in interest bearing instruments for income. Such a diversification mitigates the effects of market down turns in the stock market without major value fluctuations.
This fund is ideal for organizations and individuals who are;
- Seeking to invest in a balanced portfolio offering exposure to all sectors of the market (including offshore), but with a lower risk profile than pure equity funds.
- Willing to accept some medium risk exposure
- Want to beat inflation
Returns on the Balanced Fund
Returns consist of dividends, capital gains, interest portion and miscellaneous income from offshore investments. Distributions are done quarterly. We recommend reinvestment of the distributions into the funds order to benefit from compounded growth.
- The recommended investment term is 3-5 years; regardless an investor can withdraw their investment at any time at the prevailing prices. At withdrawal it is important for the investor to consider their investment goal and fund values. Remember you only realize a gain or loss when you liquidate your investment.
- The minimum investment amount is kshs.5000 and minimum top ups of kshs.1, 000. It is always recommended that you invest in lump sum amounts to benefit from the funds.
- The fund has an initial fee 4.5%
Please note: The prices of the balanced fund changes on a daily basis depending on the performance of the underlying assets held moving up or down due to the impact of market forces
Application Forms
CIC Unit Corporate
CIC Unit Individual
CIC Unit Joint
KE – Britam Wealth Contribution Agreement form – Individual USD final editable
KE – Britam Wealth Contribution Agreement form – Individual KES final editable
KE – Britam Wealth Contribution Agreement form – Company USD final editable
KE – Britam Wealth Contribution Agreement form – Company KES final editable
KE – Britam Unit Trust Application form – Individual final editable (1)
KE – Britam Unit Trust application form – Company final editable
