Pan Africa eyes low earners with new unit trust

Kenya: Pan Africa Asset Management (PAAM) has launched a unit trust in a bid to grow its fund management business in Kenya.

The new collective fund will see PAAM target low-income earners yet to take up investment schemes with minimum initial contributions of Sh2,500 and flexible options for partial and full withdrawal at any time.

“The uptake of unit trusts remains very low despite the relatively higher returns compared to substitute investment alternatives,” explained PAAM CEO Kennedy Muriithi.

“The total number of participants as measured by active accounts is still below 100,000 and total value of assets under management as at early this year was about Sh35.3 billion and this is a pointer to the tremendous opportunity in this market.”

The offering from PAAM includes three unit trust products - a money market fund, a dividend fund and balanced fund retailing under the names Pan Africa Pesa+, Pan Africa Pata+ and Pan Africa Chama+, respectively.

Unit trusts are investment schemes that pool money together from many investors and cede the management of their collective wealth to professional fund managers who invest it in several portfolios including shares, bonds and money market instruments.

Unit trusts are yet to gain significant traction in Kenya and the industry with players like Old Mutual, Britam and Stanbic occupying a significant place in the industry.

PAAM is banking on the low entry cost and flexible plans which include an integration with mobile money to get a slice of the pie.

Investors will be able to make one monthly emergency withdrawal of a limited amount from their savings over mobile money transfer platforms and have their mobile money account credited with the funds.

“We have launched the unit trusts in response to our clients and we believe these investment vehicles should be for the masses,” stated Mr Muriithi.