| What Is A Unit Trust?
A Unit Trust is an excellent way to accumulate wealth. It is a pool of savings by members. Fund managers invest the pooled funds in selected securities. Each person receives units depending on the size and value of his/her investment.
A unit trust is like a cake made from various ingredients, i.e. butter, eggs, flour, water, etc. Likewise a portfolio is made up of different securities. A unit on the other hand can be compared to a slice of cake. If the cake is cut into equal slices, each slice will retain an equal portion of the ingredients. Similarly if you buy the CBA Unit Trust, you will participate in a well balanced investment portfolio that is professionally managed to reduce risk and give you superior returns.
Why Invest In a Unit Trust?
a) Pooled resources: This allows the fund managers to buy shares from a position of strength in a diversified portfolio.
b) The Diversified Portfolio: Spreading your investment reduces the overall portfolio risk and maximizes returns.
c) Professional Management: Old Mutual Asset managers invest the CBA unit trust funds. They are first class professional asset managers with a track record of research and excellent returns in the Kenyan market.
d) Security: Unit Trust funds are regulated by the Capital Markets Authority. They are controlled by the Collective Investment Schemes Regulations and the Capital Markets Act, to protect the investor. These regulations relate to the activities of the Unit Trust management companies.
e) Convenience: CBA Unit trusts are easy to buy and sell, and this can be done at any time. Asset allocation can also be changed i.e. you can switch from an Equity-based fund to a Money market fund or vice versa, as desired.
f) Flexibility and Term of Investment: You can invest for as long or as briefly as you like. There is no fixed investment period.
CBA Money Market Fund
The fund manager invests the fund`s money in high quality interest bearing investments, fixed deposits, and near cash holdings in the Kenyan market.
This fund is:
Returns on the Money Market Fund:
Interest is calculated on a daily basis, and credited to the client`s account monthly. It is recommended that the income be reinvested into the fund so as to maximize investments returns through compounded growth.
CBA Equity Fund
The CBA Equity Fund is one of the easiest ways of having a professionally managed stock portfolio.
The CBA Equity fund invests in carefully selected shares and stocks listed on the Nairobi Stock Exchange. This fund is suitable for the investor, who is seeking long-term growth through dividends and capital gains from the investments.
Returns on the Equity Fund
Returns from the CBA Equity fund consist of a dividend and an interest portion. Distribution of these returns is done half yearly in June and December. This is reinvested into the fund so as to maximize returns through compounded growth.
An initial fee is chargeable on the CBA Equity fund only, as per the table below, on a weighted average basis.
Investment Amount Initial Fee Applied
| Investment Amount |
Initial Fee Applied |
| Kshs. 500,000 - Kshs 999,999 |
5% |
| Kshs. 1,000,000 - Kshs 2,999,999 |
4.75% |
| Kshs. 3,000,000 - Kshs 4,999,999 |
4.5% |
| Over Kshs. 5,000,000 |
4% |
How To Invest:
Application form: Fill out the Application form and attach all the documents listed in the application form. Contact our customer service representatives at any of our service delivery centres.
Minimum Investment Lump Sum: Kshs. 200,000.00 for each of the CBA unit Trusts Funds. Minimum additional investment amount is Kshs. 50,000.00
Fund Charges: A service fee of 2% p. a. is applicable to the CBA Money Market Fund and the CBA Equity Fund. Amounts of Kshs. 10,000,000 and above invested in the CBA Money Market Fund will have a discounted service fee of 1.75% p.a.
Downloads and Application Forms
f) To view today`s unit trust rates, please click here
PLEASE NOTE THE FOLLOWING:
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Yields are quoted NET of all taxes and fees.
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Past performance is not necessarily a guide to future investment performance.
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The prices of the CBA Equity Fund and yields on the CBA Money Market Fund may change on a daily basis. Price of units may go up as well as down as a result of changes in the value of the underlying investments.
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In certain specified circumstances, the right to redeem shares may be suspended
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There are no guarantees on the client`s capital invested. The performance of the underlying investment vehicles determines the value of your Unit Trust investments.
If you are interested in Unit Trusts and would like to find out more, please contact:
- Sarah J. Kiptoo- sjkiptoo@cba.co.ke
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