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CIC unit trusts scheme widens lead on Britam

CIC chief executive Tom Gitogo
CIC chief executive Tom Gitogo (left), CFO George Wafula (centre) and chairman Japheth Magomere at a past investor briefing. FILE PHOTO | NMG 

CIC Insurance’s unit trust scheme slightly widened its market share ahead of Britam in the first quarter of the year as industry assets under management went up by 4.5 percent.

Latest Capital Markets Authority (CMA) data on collective investment schemes shows that CIC had Sh22.4 billion in assets under management by the end of March, representing 35.1 percent of the industry total of Sh63.78 billion.

Britam’s unit trust scheme followed with assets of Sh8.67 billion, equivalent to 13.6 percent of the industry total.

By the end of December 2018, CIC and Britam controlled 34.25 percent and 14.23 percent respectively of the assets under management.

“In the quarter to March 2019, the total collective investment schemes’ portfolio under management was Sh63.78 billion. This was a 4.49 percent increase in total assets under management from the Sh61.04 billion reported in the quarter ended December 2018,” said CMA in its second quarter 2019 statistical bulletin.

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ICEA Lion had Sh7.3 billion in assets under management at the end of March, accounting for 11.44 percent of the market.

Old Mutual was fourth with a 10.51 percent market share (Sh6.7 billion), followed by CBA unit trust at 9.25 percent or Sh5.9 billion.

Unit trusts are popular with investors seeking management of funds within a larger diversified and more efficient pot, where investment decisions are taken by professionals who can gauge risk and rewarding opportunities.

The most popular fund is the money markets fund, which is predominantly invested in risk-free government securities (near-cash, interest bearing instruments) and fixed deposits.

This fund offers a relatively safe haven for investors who have a low risk appetite and are wary of fluctuating returns in other riskier asset classes such as equities.

“The largest portion of the total assets under management was invested in government securities at 51.6 percent, with fixed deposits taking the second largest share at 20.26 percent,” said the CMA.

Cash and demand deposits accounted for 11.67 percent of the total funds, CMA said, while equities accounted for 9.39 percent.

Others are unlisted securities at 3.6 percent, investments in fellow collective schemes at 2.4 percent and offshore investments at 1.08 percent.

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