Investments through Unit Trust were first introduced in Kenya in December 2001 under the watch of the Capital Markets Authority (CMA). When you enroll for a unit trust investment agreement you accept to pool resources together with other small investors and put it under a fund manager who will in turn invest it on your behalf.
DigiTrust is ICEA LION’s newly launched online platform that enables you to start investing in a Money Market Fund with as low as KES 500, essentially, it is an on boarding platform, that helps first-time investors to start investing in Money Market Fund
What is a Money Market Fund?
In simple terms, it is a low-risk investment with an element of guaranteed return. These investments mainly include interest-bearing assets like fixed deposits, treasury bills, short-term bonds and so on. The Money Market Fund is suitable for you as a saver or investor if you are seeking liquidity (the ability to access your funds easily), monthly income in the form of interest added onto your original deposit (capital) and subsequent deposits, or if you are looking to preserve your capital. It is worth noting that a Money Market Fund is a type of Unit Trust Fund investment.
What is a Unit Trust Fund?
A Unit Trust is a type of investment where people (in this case called Unit Holders) with common savings and investment goals join a collective investment scheme that is managed by a professional investment/fund manager. The key advantage of this arrangement is that all investors, big or small benefit from the economies of scale the pooled funds provide. This means that the funds are invested collectively to earn a modest return that is distributed among the Unit Holder. In Kenya, Unit Trusts are regulated by the Capital Markets Authority (CMA).
Are unit trusts ideal for me?
Unit Trusts are ideal for anyone who wants to access full-time professional management of their money. Simply put, anyone who is tired of keeping their money sitting in the bank without much returns. Chamas, small holders, students, people with busy careers etc can benefit.
The Benefits of Investing with DigiTrust
- Affordability: You need just KES 500 to start investing with DigiTrust. Once you register and start your account, the platform allows you to top up your account with any amount you get, even on a daily basis!
- Convenience: You can register, deposit in and withdraw from a DigiTrust account on your phone online or using *793# if you do not have internet connectivity! In addition, you are able to view your statement online at any time and from wherever you are.
- Enables you to plan: DigiTrust has an embedded calculator to help you estimate the much you want to save, the duration it will take you to save the amount you have in mind and the interest your savings are likely to earn you.
- Transparency: DigiTrust is a highly transparent fund. They readily share their asset allocation policy on a weekly basis straight to your email, even when it’s indicative. Once you sign up you can always monitor the return on daily on three local Newspapers, Daily Nation, The Standard and The Business Daily, as well as on their website.
- Security: DigiTrust, like all other Money Market Funds preserves your capital. This means that, at a minimum, what you deposit, comes back to and in most cases with a modest return.
Roughly how much return on investment can an investor expect?
The rate of return offered by any unit trust fund depends on factors such as:
- Returns from the market
- Types of assets within the category of unit trust you opt for
- Management skills of the fund manager
Kindly note that, historical performance does not in any way predetermine future performance of the fund. In the past 5 years, most Unit Trust arrangements in Kenya have yielded a range of 10% to 20% return on investment.
The average interest rate per annum on DigiTrust has been steady at 8% over the last two years. However, like mentioned, interest rates on Money Market Funds are always subject to market performance. When or how often you choose to withdraw your funds also affects your interest rate.
What kind of taxes and charges do you pay on DigiTrust?
DigiTrust charges a 15% withholding tax on the income you earn from your investment. This means that the money you deposit is not taxed. What is taxed is the interest your investment earns! This is the final and only tax you pay on DigiTrust.
If you are saving or withdrawing money using your mobile phone through DigiTrust’s USSD code *793# or via M-PESA, only the usual charges by the service provider apply. They accept both M-PESA and card payments.
How Do You Manage Your Money Market Fund?
They have separate self-service channels which allow existing clients to check their statements, top-up their investments, make withdrawals and engage with their contact centre team. If you have a DigiTrust account, visit selfservice.icealion.com to enjoy this convenience
Where To Start
To start investing with DigiTrust today, dial *793# on your mobile phone or visit www.invest.icealion.com You can also chat with them on WhatsApp using this link:https://wa.me/+254203892300.
If you have any further inquiries, please feel free to contact them on 0719 071999 or email at email@example.com