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Unit trusts assets rise by Sh62.3bn in three months on entry of new fund managers
Unit trusts have equally been attractive to investors particularly individuals and households based on the double digit returns on offer from the funds.
The assets under management (AUM) by collective investment schemes (CISs) rose by a record Sh62.3 billion in three months ended September to hit Sh316.4 billion.
The growth in the AUM of the schemes, also known as unit trusts is largely attributable to the inclusion of Standard Investment Bank (SIB) multi-asset fund Mansa X, as a special CIS.
The fund, which primarily invests offshore with 55.1 percent of its portfolio invested in overseas securities, contributed to Sh34.2 billion or 54.8 percent the rise in assets under management (AUM) in the three months.
SIB received the approval of the Capital Markets Authority (CMA) to transition Mansa-X, to become the Mansa-X Special Fund, while the Mansa X Shariah Fund became Mansa-X Special Shariah Fund, at the end of the second quarter.
Mansa-X is now the third largest CIS by asset base behind the CIC Unit Trust Scheme and Sanlam Unit Trust Scheme with AUM’s of Sh70.3 billion and Sh46.8 billion respectively.
NCBA’s Unit Trust Scheme and the British American Unit Trust, complete the list of top five-unit trusts with asset bases of Sh33 billion and Sh27.7 billion respectively.
The AUM of the unit trusts has grown steadily in recent years supported largely by the entry of new fund managers.
“The growth can be attributed to increase in CISs resulting from new approvals, additional funds registered in the previous quarters who commenced reporting in the third quarter, as well as general growth of existing CIS and conversion of Mansa-X funds by SIB,” the CMA said in a new report.
Unit trusts have equally been attractive to investors particularly individuals and households based on the double digit returns on offer from the funds.
The number of investors in unit trusts however grew marginally in the quarter, to reach 1,299,300 investors from a flat 1.2 million investors in June.
Money market funds (MMFs) have remained the most popular type of unit trusts, accounting for 62 percent of the industry’s AUM or Sh196.7 billion. MMFs primarily invest in Treasury bills and commercial bank demand deposits.
The CIS eco-system is set to grow further as the CMA continues to approve new players to join the space while existing parties have created new funds.
CMA approved the creation of four new funds by licensed asset management firms yesterday, including the Britam USD Money Market Fund, the Orient Dollar Money Market Fund and CIC Global Special Fund.
VCG Asset Management Limited has also been granted approval to introduce the VCG Offshore Opportunities Special Fund, which has eight specialised sub-funds.
CMA has additionally approved Faida Investment Bank Limited to establish the Oak Multi-Asset Special USD Fund, targeted at sophisticated investors while Dry Associates Limited (DAL) has earned the nod to convert its balanced fund to a high yield special fund.
“These approvals reflect CMA’s commitment to fostering innovative products, that meet evolving investor needs while ensuring compliance and transparency in the capital markets,” CMA said.
As of October 2024, CMA had approved 54 CISs comprising 232 funds. About 32 of the approved unit trusts are currently active.