‘Unit trust returns positive’
THE Securities and Exchange Commission of Zimbabwe (SecZim) says unit trust investors continue to receive positive returns as inflation continues to fall due to stable exchange rate and increased industrial output.
Unit trusts entail pooling of funds on behalf of a large number of investors, with each investor buying a certain number of units in a fund, representing their proportional investment from selected shares listed on Stock Exchanges as well as money market instruments.
Additionally, the unit trusts endeavour to achieve maximum returns and provide potential for growth on investment over the medium to long term, making them a hedge against inflation through diversified portfolio investments to reduce investment risk.
According to a July 2021 edition of the GroWealth Unit Trusts Performance Survey, the performance of unit trusts was largely driven by investment gains from listed equities.
“On average, listed equities funds recorded a positive performance of 13,32 percent against 10,06 percent recorded by the ZSE All Share index during the month under review, reflecting the Fund Managers’ strong stock picking skills,” SecZim said.
Year to date, SecZim said, the survey showed that most funds gained more than double this year, as the returns from unit trust funds that invest in listed equities grew between 130 percent and 188 percent for the first seven months of the year while for balanced funds, which invest in both listed equities and fixed income securities, the returns ranged
between 67 percent and 189 percent in the comparable period.
On the fixed income space, money market funds offered yields ranging between eight percent and 50 percent, which though below the historical inflation, is competitive when viewed against official inflation projections.
“Should inflation continue on a downward trend in line with the central bank forecasts, it is possible that fixed income funds may also start offering positive real returns in due course,” the report said.
SecZim said to give investors choices in the multi-currency environment, some fund managers had started offering foreign currency denominated (USD) unit trust funds to cater for those investors with hard currency or nostro balances.
“This widens the available options in the market. Real Estate Investment Trusts (REITS), anothercategory of collective investment schemes registered by the Securities and Exchange Commission of Zimbabwe, are expected to come on stream soon and should give even small investors an opportunity to invest in property,” SecZim said, adding that already two managers are offering property funds.
Since the launch of the GroWealth publication in November 2020, interest from different stakeholders has been growing, reflecting the impact the publication is having on the investing public.
Finance and Economic Development Minister Mthuli Ncube last year in November, launched the Gro Wealth Unit Trusts Booklet which he said the industry-wide collaboration will not only benefit the investment managers through showcasing their funds but will also assist the Government in achieving its financial inclusion goals resulting in economic development.-herald.cl.zw
