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Reviews - Botswana Unit Trusts

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Botswana Unit Trusts

What is a Unit Trust?

A Botswana unit trust, also known as a collective investment scheme, is a type of investment vehicle that pools together money from multiple investors to invest in a diversified portfolio of assets. Here’s a more detailed explanation:

Structure and Function

  1. Pooling of Funds: Investors' money is pooled together into a single fund. This pooled money is then invested in various securities, such as stocks, bonds, and other assets.

  2. Professional Management: The fund is managed by professional fund managers who make investment decisions on behalf of the investors. Their goal is to achieve the best possible returns while managing risk.

  3. Units: Investors buy units in the trust. The price of these units is determined by the net asset value (NAV) of the fund, which is the total value of the fund’s assets minus its liabilities, divided by the number of units outstanding.

  4. Diversification: By investing in a unit trust, individual investors can gain access to a diversified portfolio of assets, which helps in spreading risk.

  5. Accessibility: Unit trusts are generally accessible to individual investors, providing a relatively low-cost way to invest in a wide range of assets.

Advantages

  • Diversification: Reduces risk by spreading investments across various assets.

  • Professional Management: Beneficial for investors who do not have the time or expertise to manage their own investments.

  • Liquidity: Units can usually be bought and sold with relative ease.

  • Affordability: Allows small investors to participate in a diversified portfolio that might otherwise be inaccessible.

Types of Unit Trusts in Botswana

  • Equity Funds: Primarily invest in stocks.

  • Bond Funds: Invest in government and corporate bonds.

  • Balanced Funds: Invest in a mix of equities and bonds.

  • Money Market Funds: Invest in short-term, low-risk securities.

Regulatory Framework

Unit trusts in Botswana are regulated by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), which ensures that these investment vehicles operate in a transparent and fair manner, protecting investors' interests.

Investment Considerations

  • Risk Tolerance: Different unit trusts have varying levels of risk, so it’s important to choose one that matches your risk tolerance.

  • Investment Goals: Define your financial goals to select an appropriate unit trust.

  • Fees and Charges: Understand the fees involved, as these can impact overall returns.

Investing in a Botswana unit trust can be a prudent way to achieve diversification and professional management, helping investors meet their financial goals.

What Unit Trusts are available in Botswana?

In Botswana, there are many unit trusts managed by different financial institutions. Here is a list of some of the main unit trusts available:

BIFM (Botswana Insurance Fund Management)

  1. BIFM Balanced Prudential Fund: A diversified fund with investments in equities, bonds, and other asset classes. Factsheet

  2. BIFM Pula Money Market Fund: A low-risk fund investing in short-term, high-quality money market instruments. Factsheet

  3. BIFM Local Equity Fund: Invests primarily in equities listed on the Botswana Stock Exchange. Factsheet

  4. BIFM Global Sustainable Growth Fund: Invests in the Sanlam Sustainable Growth fund with exposure to global equity markets Factsheet

Vunani Fund Managers

  1. Vunani Botswana Managed Prudential Fund: A balanced fund investing in a mix of equities, bonds, and cash. Factsheet

  2. Vunani Botswana Equity Fund: Invests primarily in equities listed on the Botswana Stock Exchange. Factsheet

  3. Vunani Botswana Money Market Fund: A low-risk fund investing in short-term, high-quality money market instruments. Factsheet

African Alliance

Unfortunately African Alliance are below average in publishing their factsheets, so finding up-to-date information on their funds is difficult. (If you work for African Alliance please reach out to us!)

  1. African Alliance Botswana Value Fund: A balanced fund investing in a mix of equities, bonds, and cash.

  2. African Alliance Botswana Liquidity Fund: An enhanced cash fund investing in short-term, low-risk securities.

Ipro Botswana

  1. IPRO Botswana Money Market Fund: A low-risk fund investing in short-term, high-quality money market instruments. Factsheet

Kgori Capital

  1. Kgori Capital Enhanced Cash Fund: An enhanced cash fund investing in short-term, low-risk securities. Factsheet

  2. Kgori Capital Balanced Fund: A diversified fund investing in a mix of equities, bonds, and other assets. Factsheet

Morula Capital

  1. Morula Income Fund Factsheet

  2. Morula Cash Plus Fund Factsheet

  3. Morula Inflation Plus Fund Factsheet

  4. Morula Bond Fund Factsheet

  5. Morula Local Equity Fund Factsheet

  6. Morula Global Absolute Return Fund Factsheet

  7. Morula Global Equity Fund Factsheet A USD denominated fund investing in global equities.

Allan Gray Botswana

  1. Allan Gray African Bond Fund: A USD denominated fund investing in bonds and other debt securities from issuers across the African continent. Factsheet

Ninety One (formerly investec) Botswana

  1. Ninety One Botswana Managed Fund: Invests both in domestic and international equity and fixed-income markets Brochure

Important Considerations

  • Investment Goals: Each unit trust has a specific investment objective, so it's important to choose one that aligns with your financial goals.

  • Risk Tolerance: Consider the level of risk you are comfortable with, as different funds have varying risk profiles.

  • Fees and Charges: Understand the fees associated with each unit trust, as they can impact your overall returns.

For the most current and detailed information, it's advisable to consult directly with the respective financial institutions or use an independent financial adviser - such as SCI.