BK Capital, a subsidiary of BK Group has launched a Unit Trust Fund, dubbed Aguka Unit Trust Fund which has since received a license from Capital Markets Authority. The fund which will be an open-ended trust fund will pool money from investors, invest and manage the money into a diversified portfolio on their behalf and distribute the profits regularly. The Fund offering opened today for subscription with prospectus and application forms available at all Bank of Kigali Branches countrywide. There are no subscription fees to the trust fund which is open to all members of the public as well as institutions and corporates. Members of the public are invited to invest with the fund by ‘purchasing’ units valued at Rwf 100 a unit. The minimum value of units one can invest is valued at Rwf100,000 (1000 units). The trust fund will then pool the money from investors and invest the money into a diversified portfolio of money market instruments, cash deposits, and debt instruments issued by the Government of Rwanda and corporate entities operating in Rwanda. The managers of the fund say that they are aiming at achieving a competitive level of return, with high liquidity by investing its assets in a diversified Rwandan investment portfolio. Among the key features of the trust fund, BK Capital said include attractive returns noting that it will offer a yield higher than cash and money market investments. Investors will also enjoy liquidity with options to redeem their funds within 48 hours. With that, an investor can be able trade in their units and cash out on request and receive their funds in not more than 48 hours. The fund also promises regular cash flow with investors receiving predictable distributions (payment of interest) at least twice a year. The fund is tax-exempt as part of the government’s move to encourage an increase in domestic savings through investment funds. Carine Umutoni, the Managing Director of BK Capital, said that by building a well-diversified portfolio of liquid instruments, they are able to guarantee from a broad range of asset classes and deliver stable returns. “The strategy is attractive in the current environment as investors need to contend with the dual challenges of persistently low yields and an increased urgency to prioritize liquidity risks heightened today by the global pandemic. By building a well-diversified portfolio of liquid instruments, we harvest income from a broad range of asset classes and seek to deliver stable total return underpinned by steady income,” Umutoni said. The trust fund comes at a time when the country is attempting to grow the domestic savings rate from the current about 12 per cent to about 24 per cent by 2024. The domestic savings rate is important as it will create a means towards self-reliance, investment, growth as well as economic resilience. It’s out of domestic savings that the country can reduce aid reliance and finance investments. However personal savings by households and individuals in the form of cash or assets such as land which is common in Rwanda do not necessarily count as domestic savings. For the personal savings to have an impact on domestic savings, it has to be invested through avenues such as trust funds. The launch of a trust fund is also a boost to Rwandas ambitions to create an enabling business environment and aspiration to become a Financial hub in the region that is being led by the Kigali International Financial Centre (KIFC).
