Investment

How to invest in mutual funds in Uganda - My findings about UAP Old Mutual, XENO, ICEA, & BRITAM

kamasu Paul

Feb 2, 2024 — 6 min read

What are Mutual funds?

Mutual funds, commonly known as unit trusts, are collective investment schemes that pool money from various investors to invest in assets like government bonds and stocks.

This article aims to provide insight into investing in mutual funds in Uganda, covering the workings of mutual funds, popular funds in the uganda, and the process of investing.

Disclaimer: The author of this article is not providing investment advice. Instead, the article is crafted in the author's pursuit of addressing queries related to mutual funds.

How do Mutual funds work?

Mutual funds operate as collective investment vehicles, bringing together funds(money) from different individual investors. These funds are then divided into units or shares, where each share signifies an individual's ownership of the fund's assets. Essentially, when an investor purchases shares from a mutual fund, they are acquiring a stake in the collective ownership of the fund.

The combined funds from all investors are strategically invested in various assets, such as bonds or stocks.

The fundamental idea behind mutual funds is to provide a diversified investment approach, even for individuals with smaller amounts to invest. This diversity is managed by professional fund managers who aim to balance risks and optimize returns. By spreading investments across different assets, mutual funds offer investors the opportunity to participate in a professionally managed portfolio, fostering the potential for more robust financial outcomes.

Why should I invest in a mutual fund?

Investing in mutual funds has one notable advantage over other investments – these funds spread their investments across a variety of assets. This diversification helps lower the risk associated with investing because your money isn't tied to just one company's stock. In simple terms, choosing mutual funds over individual stocks can be less risky, providing a more balanced and safer investment option

Which Mutual Funds are Available in Uganda?

If you're considering investing in mutual funds in Uganda, this list provides a concise overview of the most popular options available in Uganda.

#1. UAP OLD mutual.

UAP Old Mutual provides mutual funds through its unit trusts products, offering three distinct types:

Unit Trust Money Market Fund: This is a low-risk fund focusing on fixed-income investments with a maturity of less than 36 months (3 years). The minimum investment is UGX 100,000, and the fund incurs a management fee of 2% per annum.
Unit Trust Umbrella Fund: Another low-risk option investing in interest-bearing securities like treasury bills, treasury bonds, and corporate bonds.
Unit Trust Balanced Fund: Recommended for long-term investment (3 to 5 years), this fund offers a more diverse investment portfolio. The minimum investment remains UGX 100,000, and there is no management fee charged annually.

#2. XENO.

Xeno Investment Management Limited holds a license from the Capital Markets Authority as a fund manager. Xeno offers a singular financial product designed for saving and investing your money.

XENO strategically invests in various assets, including Money Markets (Treasury bills), Bonds (Government-issued bonds in East Africa, such as Treasury bills, Corporate bonds, and Infrastructure bonds), as well as Shares of companies listed on the stock exchange in Uganda (Domestic equities) and the East African region (Regional equities).

How does XENO work? when it comes to mutual funds

It involves creating a savings goal and specifying the duration, contribution frequency, and amount for each savings interval. With a minimum savings requirement of UGX 10,000 and a default duration of 5 years, the app generates a summary of expected returns. Upon plan approval, the app guides you through initiating your first deposit.

#3. ICEA

ICEA Lion comprises a group of companies providing a spectrum of financial services, ranging from insurance to asset management. Within the ICEA group, ICEA Lion Asset Management is responsible for investment-related activities

What Mutual funds does ICEA have?

Within the ICEA group, two distinct mutual funds fall under the umbrella term "Unit Trusts":

ICEA Money Market Fund: Tailored for low-risk preferences, this fund ensures guaranteed returns, allowing investors to withdraw their funds at their convenience. The minimum investment amount is UGX 30,000.
ICEA Hybrid Market Fund: Positioned as a moderate-risk investment, the ICEA Hybrid Market Fund caters to individuals seeking a more diversified range of investments. Notably, this fund offers liquidity, providing investors the flexibility to withdraw their funds whenever they desire.

#4. BRITAM

Britam is a financial services group headquartered in Nairobi, Kenya, and extends its services across Uganda, Kenya, Tanzania, Rwanda, Malawi, and South Africa. Britam offers four diverse investment products

Britam Money Market Fund: This fund focuses on low-risk investments such as bonds and treasury bills, providing returns ranging from 8 to 10%. The minimum investment is UGX 100,000.
Britam Fixed Income Money Market: Geared towards fixed investments over periods of 3, 6, or 12 months, this fund offers a higher return of 10%. However, it requires a comparatively larger minimum investment. Investors can choose between USD or UGX, with a minimum of UGX 2,000,000 or USD 10,000.
Unit Trust Funds: These funds pool money from various investors, directing investments into low-risk assets like equities and bonds

#5. SANLAM

Sanlam is a financial services company based in South Africa, that provides a range of insurance and investment products. When it comes to investments, they offer a singular product known as unit trusts, specifically referred to as the Sanlam Income Fund or Sanlam Umbrella Fund.

The Sanlam Income Fund is designed to invest in low-risk assets, including treasury and corporate bonds, shares, and property. For those looking to invest, the minimum required investment amount is UGX 100,000.

How do I invest in mutual funds in Uganda?

Now that we've explored various companies in Uganda offering unit trusts, let's delve into the steps for initiating investments with each of these companies.

How to invest with UAP Old Mutual?
To begin investing in unit trusts with UAP Old Mutual in Uganda, kickstart the process by requesting a call back. Follow these simple steps:

Visit the Uap old mutual website at the unit trusts page and
Locate and click on the "Request a Call" button; this action will prompt a form to appear.
Complete the form with your name, telephone number, and email address.
Submit the form by clicking the "Call Me Back" button. Once submitted, UAP Old Mutual will get in touch with you, guiding you through the subsequent steps of the investment process.

How to invest with XENO?
While Xeno doesn't label its product as a mutual fund or unit trust, it essentially functions as one. To commence your investment journey with Xeno,

Visit the join XENO website or download the Xeno app
Choose your preferred investment category from options like personal, with a partner, with a SACCO, or institutional.
Define the specific goal you intend to achieve through your investment.
Enter and verify your details, including email, phone, and name, following the provided prompts.
Specify the frequency of your savings – whether daily, weekly, or monthly.
Select the amount you wish to save based on your chosen frequency.
Review and approve the presented savings plan.
Complete the process by depositing the approved amount using your mobile money.

How to invest with ICEA?
ICEA Group provides a digital platform, ICEA Digit Trust, for investors interested in their unit trust products. To access this platform, registration with a phone number and national ID is required. It's important to note that currently, the platform appears to only support Kenyan phone numbers. As an alternative option for those in Uganda, initiating investment with ICEA involves requesting a callback.

Visit the ICEA unit trust website page
Scroll to the Request a Call Back section
Fill the form with your names, telephone, email and the times at which they can call you back and then submit
Icea will contact you with the next steps

How to invest with BRITAM?
To invest with Britam you have to request a callback. To do this

Visit the Britam website unit trusts page
Scroll to the Request a Call Back section
Fill the form with your name, email, phone number and comment and submit
Britam will be in touch for the next steps

How to invest with SANLAM?
To invest with Sanlam, you have to contact them, and to do this

Visit the Sanlam unit trusts page
Scroll to the contact up page
Fill the Contact Us page with your name, email, phone number and email message and then submit the form

Conclusion

There are primarily five companies where you can acquire unit trusts or mutual funds: UAP Old Mutual, ICEA, XENO, BRITAM, and SANLAM. Each of these companies offers distinct products tailored to various preferences. I trust this article has provided you with some insights into the diverse investment products offered by different financial services providers. If you found this information valuable or enjoyed the article, consider subscribing, as we regularly publish similar articles.

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