The world is fast paced and is ever changing. The business and investment world is no different. Gone are the days when opening up a savings account and waiting for it to gain interest was the ultimate savings tip. More and more Batswana are opening up to the world of different types of investments, ranging from purchase of shares to unit trusts.
A unit trust is the pooled money of many investors that is invested in the financial markets through a single collective investment scheme – called a Unit Trust. Unit trusts afford the regular Motswana the chance to make a worthy investment. They provide individuals with the opportunity to become a part of something bigger, something which alone they could not afford: shares. Most people miss out on the chance to invest in share ownership because shares are expensive and individually they cannot afford the purchase. For a long time, the high prices of some shares have been like an iron bar, prohibiting individual investors from purchasing them. Unit trusts are the solution; they are accessible to everyone and affords the regular man on the street the opportunity to be a part of something with bigger returns.
With Bifm’s latest unit trust offering, is opening up its market leading expertise to the ordinary man. An individual can invest as little as P200 and enjoy maximum returns. Individuals put in different sums of money and the company lumps up their individual investments (puts them into a portfolio) and buys shares on behalf of the investors. The fund manager then divides the portfolio into many equal “units.” The investor receives a certain number of units for the money he has entrusted to the company that manages the unit trust.
Because of their proven track record, unit trusts have become an ideal way of providing for medium-term needs. Investing in unit trusts can meet your needs for a deposit on a home, an education for your child or owning your own car. Unit trusts are therefore medium to long-term investment avenues (five years and longer).
The beauty of unit trusts is that the investor needs no expert knowledge. The individual doesn’t require experience in buying or selling or knowledge of shares. Teams of professional economic and market analysts will invest on the investor’s behalf to ensure the maximum capital and income growth. And with their team of experienced professionals, one can rest assured that the fund managers handling their money will make sound decisions and picks for your money.
Making any investment is always associated with risk due to fluctuations in the market. But like with all things, great rewards usually come with risk and the same rings true with unit trusts. However, unlike direct individual investments, unit trusts have shown a stable or better performance due to the diversification of the investment. The advantage of being diversified across a broader range of shares, bonds or other securities is that your investment risk is reduced. For example, if one share or market sector does not perform well, this may be mitigated by the strong performance of other shares or sectors in which the fund is invested.
And with this new addition to their already diverse portfolio, Bifm is offering Batswana the gateway to building their wealth and gaining financial prosperity. Small investments go a long way in building up to something greater with time, and what better way to start than to part with small money and be a proud owner of some shares on the BSE.
