BK Group’s youngest subsidiary, BK Capital on Tuesday October 13, launched a trust fund dubbed Aguka Unit Trust Fund. Aguka will operate as an open-ended unit trust fund pooling funds from investors, investing and managing the money within a diversified portfolio on their behalf and distributing the profits regularly. Below are key aspects about the trust fund: Who can invest? The trust fund is an open-ended unit trust fund and is open to individual citizens and residents, the Rwandan community abroad as well as local corporations and institutions. East African Community nationals and international investors within the permissible legal framework are also allowed to invest. Carine Umutoni, the Managing Director of BK Capital said that they are targeting all segments of the marketing including individuals, institutions, savings groups, investment groups and anyone seeking to save or invest their funds. BK Capital which is the investment manager injected a seed capital of about Rwf200m to support the fund achieve scale on launch. How to invest The Fund offering opened on Tuesday 13, October 2020 until 13 November 2020 where interested investors can ‘purchase’ units at Frw 100 per unit. The minimum investment is Frw100,000 which is worth 1,000 units during the subscription period. After 13th November 2020, interested investors will still be able to invest by buying units in the fund at the net asset value which will be published daily. Investors can buy units on any given business day in Rwanda Prospectus documents and application forms are available at all Bank of Kigali Branches countrywide. Where will the trust fund invest? According to the prospectus document, the fund will invest in a diversified portfolio of money market instruments, cash deposits, and debt instruments issued by the Government of Rwanda and corporate entities operating in Rwanda. Umutoni said that they see an opportunity in government bonds which are regular and have multiple options of tenure. “We are going to spread the investment across all tenures with the intention to trade. We will also make investment in other big funds that are going to be available on the market,” she said. With Rwanda in the process of establishing itself as a financial hub in the region through the Kigali International Financial Centre (KIFC) and plans to grow capital markets, the fund managers are confident of multiple opportunities for investment in coming days. Some of the funds according to Umutoni will also be invested in BK Group’s banking subsidiary, Bank of Kigali. What are the returns on investment? The fund is positioned as a low risk product with a diversified asset allocation making it capable of generating a competitive rate of return on investment when compared to traditional savings deposits and treasury bills. Following the closing of the offer, the investment manager will disclose the net asset value which will reveal the total value of the fund. BK Capital will also calculate and disclose the net asset value and annual yield every business day allowing investors to keep track of the performance of their funds 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. Investors will also enjoy liquidity with options to redeem their funds within 48 hours. With that, an individual investor can be able trade in their units and cash out on request and receive their funds in not more than 48 hours without charge. The fund also promises regular cash flow with investors receiving interest payments at least twice a year. How does it promote domestic savings? The fund also seeks to support Rwanda’s domestic savings ambition from the current about 12 per cent to the targeted 24 per cent by 2024. For domestic savings to grow, there has to be multiple avenues of investment in an economy. Higher domestic savings rate creates a means towards self-reliance, investment, growth as well as economic resilience. Personal savings by households and individuals in the form of cash or assets such as land which are common in Rwanda do not necessarily mean a growth in domestic savings. For the personal savings to count as domestic savings, they have to be invested and generate income hence the need for avenues such as trust funds. Previously, there has only been one similar fund Rwanda National Investment Trust Ltd which runs Iterambere Fund. The fund is tax exempt as part of the government’s move to encourage an increase in domestic savings through investment funds.
