ICEA LION UNIT TRUSTS

What Is A Unit Trust?

A Unit Trust is a type of investment where people with common savings and investment goals join a collective investment scheme that is managed by a professional investment/fund manager. The key advantage of this arrangement is that all investors, big or small benefit from the economies of scale the pooled funds provide. In Kenya, Unit Trusts are regulated by the Capital Markets Authority (CMA). 

Helpful Hint: A Unit Trust Fund may easily be confused with the Trust Fund that is linked to how your property and assets will be distributed to your beneficiaries. Click here to find out more about those Trust Funds.

What Types Of Unit Trusts Are Available At ICEA LION?

In Kenya, there are four main types of Unit Trust Funds: Money Market Fund, Growth also known as Balanced Fund, Equity Fund and the Bond Fund also referred to as Fixed Income Fund.  

How you select a Unit Trust Fund is dependent on your individual saving and investment objectives as well as your risk appetite. To help you understand Unit Trust Funds, here’s a brief breakdown of the four Unit Trust Funds we have at ICEA LION with their corresponding risk levels.

What Can You Tell Me About ICEA LION’s Unit Trust Funds & Their Risk Levels?

1.  Equity Fund: This fund invests primarily in listed companies on the Nairobi Securities Exchange (NSE). The Equity Fund is suitable for savers and investors seeking long-term capital growth. 

Risk Level: Medium-High. This is because the interest to be earned is subject to market forces, so there are no guarantees on return due to the fact that the fund value varies day to day, based on market performance. An investor may therefore reap great rewards or suffer loss depending on when they cash in.

2.  Growth (Balanced) Fund: This fund invests primarily in listed companies on the Nairobi Securities Exchange (NSE) as well as investment instruments that allow you to gain interest on your investment such as in fixed deposits and bonds. The Growth / Balanced Fund is suitable for investors seeking a balanced portfolio between liquidity (the ability to access your funds easily) and growing your capital. 

Risk Level: Medium: This is a less risky fund than the Equity and Bond Fund because your capital is invested in both secure and interest earning investments that vary subject to market forces. As such, with this fund, the probability of loss of your capital is reduced.

3.  Money Market Fund: This fund invests primarily in interest bearing assets like fixed deposits and short-term bonds. The Money Market Fund is suitable for investors seeking liquidity (the ability to access your funds easily), monthly income in the form of interest added onto your capital as well as preservation of your capital. 

Risk Level: Low: This is considered the least risky fund because you never lose your invested capital however, you should note interest vary day to day depending on market performance. 

4.  Bond Fund: This fund invests primarily in a diversified portfolio of treasury and corporate bonds. The Bond Fund is suitable for investors seeking to put their money in a diversified portfolio of bonds that offer regular or periodical income. 

 Risk Level: Medium- High: This is because the interest to be earned is subject to market forces, so there are no guarantees on return due to the fact that the fund value varies day to day, based on market performance. An investor may therefore reap great rewards or suffer loss depending on when they cash in.

So What Are The Benefits Of A Unit Trust Fund?

  1. Affordability: At ICEA LION, you can set up your Unit Trust Fund account of your choice for as little as Kes 500/- and up with whatever amount you wish to save or invest at any time. You can set this up at your convenience by visiting our DigiTrust Page that allows you to plan for, set up, deposit and withdraw your funds at the click of a button.  
  2. Ease of Access to Funds: Also known as Liquidity, Unit Trust Funds offer you the opportunity to access your funds easily. There are no fixed periods par se so you can access your money whenever you need it in part or as a whole, with no penalties. At ICEA LION, for amounts less than xxxx via mobile money, you can access your funds under 24 hours, whilst those above xxxx can be sent to your bank account within 3 working days. 
  3. Transparency: Unit Trusts are created by what is called a deed, which constitutes a contractual agreement that governs the relationship between you, the investor, the investment/fund manager, the trustees and Capital Markets Authority, who supervise and ensure the integrity of the investment plan for Unit Trusts. As a result, the investors rights are protected.
  4. Economies of Scale: The fact that your investment is pooled with others, gives you access to investments that would otherwise be unaffordable or inaccessible to you as an individual investor. 
  5. Professional Investment Management: Your funds are managed by a team of qualified and experienced professionals who advise and guide you throughout your investment journey based on your goals, risk profile and your current financial position.
  6. Diversification of Investments: Unit Trusts take advantage of the pooled funds to give individual investors access to a variety of investment instruments. The economies of scale offer the opportunity for investment in diverse portfolios which you would otherwise not be able to enjoy as an individual. Further, the diversified range of assets reduces the risk you would face if you directly invested in only one asset class.

If you would like to find out where ICEA LION invests in order to deliver returns for our Unit Trust Funds, click here

Now that you understand the basics of a Unit Trust Fund and would like to invest with us, click here to get started. If you would like to talk to us in person, you can call us on xxxx or request a call back by clicking here.

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