British-American Unit Trusts
1. What is a unit trust?
A unit trust is a collective investment scheme in which investors’ contributions are pooled together to purchase a portfolio of financial securities, such as equities (shares), bonds, cash, bank deposits etc. The portfolio is managed by professional fund managers.
2. What is a unit?
Your contributions to a unit trust are used to purchase units. Each unit represents an equal fraction of the total value of the pool of invested money.Units in the British-American Unit Trusts are brought from the fund manager, British-American Asset Managers Limited, and sold back to them in the event unitholders need to redeem their units.
3. What Should I consider before I invest in a Unit Trust?
Before considering investing into a unit trust, the following should be ascertained:
-Your risk profile;
Unit trusts are considered appropriate investment vehicles for individual investors wanting to gain long-term exposure to financial markets.However, the value of a unit trust depends on the value of the underlying assets within the portfolio. Therefore, the value of the unit trust will fluctuate as the values of the underlying assets fluctuate.
4. When is the best time to invest in unit trusts?
You can invest at any time.
However, it is very difficult for an investor to predict market conditions i.e. to buy units at the lowest price and sell them at the highest price. Our knowledge and insight into the workings of the financial markets enables us to provide the investor with expertise which takes into account market fluctuations. and applies an effective investment strategy.
One of the most common mistakes made by investors is to switch in and out of unit trusts based on short-term performance figures. Periodic switching between funds can lead to increase in the cost of transactions, which can reduce the return on your investment.
It is important to note that portfolio managers do not manage funds on a short- term basis. Most portfolios, particularly equity funds, are managed to generate consistently good returns over a period of five years and above.
A good strategy is to buy unit trusts on a regular basis - termed shilling cost averaging. This method allows you to avoid the risk of poor timing, which may result in buying when the market is high and selling when the market is low.
5. What are the benefits of investing in a unit trust?
You gain several benefits from pooling your money in a trust with other investors.
The fees and charges are transparent and are published in the Information Memorandum. Information on the investment performance is provided in a report audited by external auditors. Each unit trust has a Trust Deed, the legal document establishing the trust, and an Information Memorandum, of which a copy are available by email.
6. What returns can I expect from my investments?
Investment returns on a unit trust fund depend on the following:
-Returns from the financial markets;
The value of shares, bonds and other asset classes are determined by financial markets and can rise or fall over time.
7. Please provide some tips for successful investing?
Before investing, it is useful to follow the following steps to ensure success:
The Fund is designed for investors who require a low risk investment which offers a high income yield, capital stability and immediate liquidity.The Fund is a good parking place or safe haven for investors who wish to switch from a higher risk portfolio to a low risk, high interest portfolio, especially during times of high stock market volatility.
It is also ideal for investors who wish to make a lump sum investment and wish to reduce timing risk by regularly transferring amounts to other more aggressive portfolios.This is a low risk fund with zero initial charge.
The Fund is suitable for investors are seeking a regular income from their investment, including those who intend to secure a safe haven for their investments in times of stock market instability.
The Fund can be used a means of drip-feeding investments into the Equity Fund over a long period of time.
The Fund will also take advantage of initial public offerings (IPOs) of companies currently owned or controlled by private investors and/or the Governments of Kenya, Uganda and Tanzania the neighbouring countries. The Fund aims to achieve its performance objectives through well-researched and superior share selection. The fund will have some exposure to offshore listed companies, denominated in Euro, Sterling or Dollar.
This fund is designed for investors seeking medium to long term capital growth in their portfolio and who want to gain exposure to equity investments.The fund is suited to investors who want to invest their money over a period of at least 5 years.The Fund is a medium to high risk fund. Risk will be reduced through holding a diversified portfolio of shares across most sectors.
1. Why Do I Need Insurance?
An insurance policy is vital for the purpose of transferring insurable risk from oneself to a risk carrier i.e. an insurance company. All of us are exposed to risk in our day to day lives, however, our level of awareness regarding our situation and the method of managing risk is generally low.
Risk of hospitalization costs, accidents at home or in motor vehicle, damage to our homes, burglary and loss of property, income interruption for the family as a result of demise of breadwinner(s) are common insurable risks to which individuals are exposed. Businesses are exposed to fire and related perils risks, income interruption as a result of fire, damage to property among others.
If a risk is not transferred to an insurance company then the individual or firm assumes the risk themselves deliberately or by default and in the absence of setting aside sufficient funds to deal with the eventuality of the risk there would be danger of detrimental financial consequences arising.
2. When Should I Take Insurance?
An insurance policy should be taken at the earliest available opportunity after the risk has been identified and its consequences quantified. Assistance in the identification of risk, quantifying the consequences of the occurrence of the risk, and the most suitable policy for addressing the risk is available from an insurance company, insurance agent or insurance broker.
3. a) What Options Of Policies Does I Have?
There is a wide array of policy options available structured to insure against different types of risk i.e. risk on the person, on property or on income. Policies taken to insure against risk on the person or on income are varied and differ from one insurance company to the other. However, individual product composition can include several risk factors such as hospital expenses, disability and funeral expenses depending on what the insured is able to purchase. One can also have a policy to assist in financial planning or savings for future eventualities such as meeting a child’s education costs.
Policies taken to insure against risk on property are structured to ensure that the insured is able to operate as normal as possible in the event the eventuality they are insured against does occur e.g. policies taken against fire, motor accidents and theft
At British-American, we are able to offer our clients different types of policies to meet their insurance needs be they for life or general insurance.
3. b) Why And When Should I Go For Each One Of Them?
Some of the insurance policies available are legislated and mandated by law e.g. motor insurance and work injury benefits. However, it is important to insure oneself and property against risk as early as possible to mitigate the effects of adverse occurrences such as accidents, loss of income due to injury, burglary e.t.c. especially since it is impossible to forecast them.
The importance of safeguarding your children’s future by planning and saving for their education as early as possible can also not be overemphasized.
1. What Is a Pension Scheme And How Does It Work?
Simply defined, a pension scheme or a provident fund is a long-term investment vehicle whose principal objective is to provide you with a decent and reliable income in retirement. Retirement is said to be the longest holiday you will ever have. It therefore makes a lot of sense to start preparing for it early enough and join the few who look forward to retirement with a smile!
British-American offers (1) individual pension plan for the self employed or for those employed in firms that do not operate a scheme (2) Umbrella Pension Scheme for SME’s (3) Occupational Pension Schemes for big employers, to help you make regular monthly contributions towards your retirement fund.
Once you contribute, the funds are invested prudently and you receive periodical fund value statement over the period of engagement. Individual Pension Plans are particularly flexible in that you can vary your contributions depending on the economic fortunes of the day.
2. Why Is It Important For Me To Join A Pension Scheme?
Unique benefits accrue to members of a registered pension or provident fund e.g. income tax exemption on contributions and investment income, tax free benefits on early withdrawal or on attainment of retirement age (up-to prescribed limits) and compound interest accrual hence faster growth of savings.
In addition, members can now use their pension savings as an additional security for mortgage loans thereby securing better mortgage loan terms from the approved financiers. This way, you do not have to wait until retirement in order to own a house – you now have an opportunity to leverage on your savings way before retirement age!
3. Who Should Have A Pension Scheme?
Everyone! In fact saving for retirement from the first day of gainful employment is a given in developed countries. Your financial plan is certainly incomplete without a pension plan. All of use will retire with a myriad of financial obligations still to care about e.g. school fees, household expenses, mortgage loans etc but the most critical of them all is medical expenses which unfortunately tend to escalate with age. One sure way of planning for these crucial expenses is making regular savings through a pension scheme.
4. What Role Does My Employer Play In The Pension Scheme?
Provision of pension benefits as a part of the employment package is a key pointer to a caring employer. Such an employer will normally match what you contribute or even go higher. This way, your employer literally partners with you in investing to secure your future. It is a sure way of demonstrating that you are highly valued both during and after employment. You are appropriately rewarded for investing the best of your active life years in the employer.
1. Can Insurance Help Me Save For My Child's Education?
Investing in education is the most important gift you can give your child. Insurance can indeed assist you to save efficiently for future school fees requirements.
The plan has been specifically designed to provide funds for your child’s fees while in secondary school and a lump sum amount for joining university. Under this unique plan, your child is the insured person.
2. What Other Benefits Does The Product Have?
Elimu Bora education plan also has benefits such as guaranteed cash bonuses, child hospitalization benefit and tax relief amongst others.
1. How Do I Ensure That My Family And I Are Protected When I Get Injured?
Because life doesn’t always go as planned, it is important to plan for future unforeseen circumstances that could interfere with your family’s well-being. Accidents in particular are debilitating and can leave you without an income and hefty hospital bills to pay.
The Accishield policy from British-American is a Personal Accident policy that provides cover for medical expenses, permanent or total disability, death, artificial limbs and funeral expenses due to accidental injury. This gives you peace of mind to go on with your everyday activities.
2. Who In My Family Is Covered?
The Accishield policy covers you and upto 4 members of your family