Kenyans are increasingly reverting to fund managers for investment opportunities to save themselves the hustle of choosing where to place their money.
This has seen a rise in the uptake of unit trusts in the country in the past ten years which has been driven by increased digitisation, a new report shows.
A unit trust is a fund where investor contributions are pooled together to purchase a portfolio of financial securities, such as equities (shares), bonds, cash, fixed deposits and it is managed by professional fund managers.
Unit trusts are easy to invest in with a very low bar of entry, of as little as Sh1,000 giving clueless retail stock investors a chance to put their money under the watch of a licensed fund manager and custodian as well as a trustee.
The number of these retail investors participating in Unit Trusts, as of September 2022 hit a high of 300,000 from 84,000 a decade ago.
The Capital Markets Authority in its quarter four soundness report, says that a number of firms in the markets have leveraged technology to avail capital markets-related products to investors.
CMA notes that the increase in retail investors has also been fuelled by the approval of more fund managers and asset classes under umbrella Collective Investment Schemes.
As at August last year, there were about 20 active and regulated unit trust firms including CIC, Coop Trust, ICEA Lion, Britam, NCBA, Old Mutual, Stanlib, Madison, Dry Associates, Zimele, Amana, Equity, Genghis, Cytonn, Nabo, Apollo, African Alliance and Alpha Africa.
“As at September 2022, the total assets under management by the Collective Investment Schemes were Sh155.90 billion, a 6.38 per cent increase from Sh145.77 billion managed in the quarter ended June 2022,” the report reads in part.
According to CMA, digitalisation and social media use have reshaped the marketing and distribution of financial products easing access to a broad range of financial products, particularly by retail investors.
In the two months leading to the new year Chumz App, Innova Limited, FourFront Management, and Hisa App fund managers were admitted and successfully graduated from the CMA Regulatory Sandbox.
