Old Mutual Unit Trust enters Malawi market
12/09/2011

Old Mutual Unit Trust Company (Malawi) Limited has entered the Malawi market as the first collective investment scheme for short to medium-term investments.

The company's general manager, Khumbo Phiri, told journalists in Blantyre on 09/09/2011 that Unit Trust, launched on September 1, 2011, is a new concept that will change the investment world in Malawi.

"A unit trust is a pool of savings by like-minded serious investors. Old Mutual invests this pool of savings in a spread of investments (a combination of interest bearing securities, company shares and cash) on the MSB (Malawi Stock Exchange). This spread of investments is called the portfolio.

"Each person receives units from Old Mutual in return for his/her investment. Each unit has the same value and is an undivided share of the portfolio," explained Phiri.

He added that minimum investment is K360 000 with any subsequent investment of not less than K30 000.

Phiri said the benefits of investment in unit trusts include diversification in that the trusts are a cost-effective way of accessing a share portfolio, convenience where investors are not tied in— can access, switch and transfer their money at any time.

There is also transparency in all the charges applicable and liquidity because money due to the investor is available in the short term.

In the Old Mutual Unit Trust, an investor can open different accounts such as individual and corporate accounts.

Old Mutual Unit Trust Company was licensed by the Reserve Bank of Malawi (RBM) in March. The establishment of the company was made possible by the passing of the Securities Act and the Collective Scheme regulation.

On his part, Old Mutual managing director Chris Kapanga said the MSE-listed company underwent a strenuous examination by the RBM before being given the licence.

"The RBM could not have given us a licence if we were not fit and proper. We had to go through a rigorous check," he said. Phiri explaining the concept of unit trusts.

<< Back