Unit trusts have returned mixed performance in returns over the past six months amid flat growth of government securities yields and a stable shilling.
The majority of money market funds, which account for about 78 per cent of total funds under management for the unit trust industry, have seen their annualised returns fall slightly in the past six months, while equity funds have recorded higher growth in line with a recovering stock market.
Analysts say that smaller money funds have tried to build up their asset base by offering higher yields. In December, the average return on all money market funds was 8.2 per cent, while that of the five largest funds was 6.4 per cent.
“This implies that annualised returns from small funds had been upped to build assets under management ahead of the year end,” said Kestrel Capital in a unit trust analysis.
“According to our survey done on equity funds, the average net asset value realised positive annual gain of 8.5 per cent and 4.8 per cent respectively on a simple average and the AUM weighted average basis,” said the firm.
The movement of unit trust returns mirrors that of underlying assets. For the money funds, prevailing government security yields are a major factor.
In the past six months, the yield on the 91-day paper has fallen from 8.2 per cent to eight per cent, while that of the six month paper is flat at 10.4 per cent.