[Image source: C-Trade]
C-Trade has introduced Unit Trusts as a means for investors to diversify risk and access capital in the medium/long term.
Let’s talk Unit trusts…
Unit trusts are in essence mutual funds – a financial vehicle made up of a pool of money collected from many investors in the form of stocks, bonds and other assets. Unlike other mutual funds in a unit trust, the profits go straight to an individual. The investor is considered the beneficiary of the trust.
Unit Trusts are also different from regular stocks in that your share in the unit will not give voting rights instead just representing investments in many stocks.
So how will C-Trade’s Unit Trusts work?
C-Trade shared some info in their blog post and the biggest takeaway is that at the moment Old Mutual is the only Fund Manager available. This means investors will be able to invest in Old Mutual’s Property Fund, Bond Fund, Balanced Fund, Money market fund and Equity Fund.
This move is meant to eliminate face to face interactions by automating the front-end interface between Old Mutual Unit Trusts and its subscribers while increasing accessibility and visibility of Unit Trusts.
Beyond Old Mutual, C-Trade has said they are working to add more Fund Managers.
Obviously having such investment options available digitally can only be a good thing and will help the Securities and Exchange Commission of Zimbabwe’s (SECZ) mandate of having more retail investors participate in the local capital markets.
At the time of writing I checked the C-Trade application to see if it is updated to include the Unit Trusts and whilst the icon is there, there isn’t any data yet. Because the service has already been announced, I believe it will only be a matter of time before the Unit Trusts are fully functional.
C-Trade also announced that they still have a number of improvements coming to the platform;
C-TRADE has a number of enhancements lined up to allow to provide investors with a wide array of convenient choices and products to invest in within the local capital market.