What Are Unit Trusts in Kenya?
Important Note: Laren as Your Trusted Intermediary
Laren Insurance Agency acts as an intermediary, not a fund manager. We partner with licensed and regulated fund management companies in Kenya to provide you access to a diverse range of unit trust products. Our role is to offer expert guidance, help you select appropriate funds based on your financial goals, and facilitate your investment journey.
Unit trusts are collective investment schemes regulated by the Capital Markets Authority (CMA) in Kenya. They pool money from multiple investors to create a diversified portfolio of assets managed by professional fund managers. Each investor owns "units" representing their share of the fund's assets.
Unit trusts offer an accessible way for individuals to invest in professionally managed portfolios, even with modest amounts of capital. They provide diversification, professional management, and liquidity that would be difficult to achieve with direct investments.
Types of Unit Trusts
1. Money Market Funds (MMFS)
These funds invest in short-term, high-quality debt instruments and provide stability with modest returns. Ideal for:
- Conservative investors seeking capital preservation
- Emergency funds or short-term savings goals
- Investors needing high liquidity
- Parking funds temporarily while deciding on longer-term investments
Typical Returns: 8-10% annually (varies with market conditions)
Risk Level: Low
Minimum Investment: varies with fund manager
2. Equity Funds
These funds primarily invest in company stocks/shares and aim for capital growth. Suitable for:
- Growth-oriented investors with longer time horizons
- Those comfortable with market fluctuations
- Investors seeking higher potential returns
- Long-term wealth accumulation goals
Typical Returns: 12-18% annually (varies with market performance)
Risk Level: High
Minimum Investment:varies with fund manager
3. Balanced Growth Funds
These funds maintain a balanced portfolio of equities and fixed-income securities. Perfect for:
- Investors seeking a middle ground between growth and stability
- Medium-term financial goals (3-7 years)
- Those wanting exposure to equities with some downside protection
- Investors with moderate risk tolerance
Typical Returns: 10-14% annually
Risk Level: Medium
Minimum Investment: varies with fund manager
4. Fixed Income Funds
These funds invest in government and corporate bonds, focusing on income generation. Best for:
- Income-focused investors
- Conservative investors seeking regular returns
- Those approaching retirement or needing stable income
- Portfolio diversification
Typical Returns: 9-12% annually
Risk Level: Low to Medium
Minimum Investment: varies with fund manager
Unit Trusts Comparison
| Feature | Money Market Funds | Equity Funds | Balanced Funds | Fixed Income Funds |
|---|---|---|---|---|
| Primary Objective | Capital preservation & liquidity | Capital growth | Balanced growth & income | Regular income |
| Risk Level | Low | High | Medium | Low-Medium |
| Typical Returns | 8-10% | 12-18% | 10-14% | 9-12% |
| Investment Horizon | Short-term (0-2 years) | Long-term (5+ years) | Medium-term (3-7 years) | Medium-term (2-5 years) |
| Liquidity | High | Medium | Medium | Medium |
| Minimum Investment | varies with fund manager | varies with fund manager | varies with fund manager | varies with fund manager |
Benefits of Unit Trust Investing
Professional Management
Expert fund managers make investment decisions on your behalf, leveraging their market expertise and research capabilities.
Diversification
Spread your investment across multiple assets and sectors to reduce risk and enhance potential returns.
Accessibility
Start investing with relatively small amounts and make regular contributions to build your portfolio over time.
Liquidity
Easy to buy and sell units as needed, with most funds offering quick access to your money when required.
Transparency
Regular reporting on fund performance and holdings, with clear disclosure of fees and charges.
Regulatory Protection
All funds are regulated by the Capital Markets Authority, ensuring proper governance and investor protection.
Cost Efficiency
Benefit from economies of scale in trading and management, with lower costs than individual investing.
Expert Guidance
Our advisors help you select appropriate funds and provide ongoing portfolio monitoring and advice.
How to Choose the Right Unit Trust
Selecting the appropriate unit trust depends on several factors:
- Investment Goals: Are you saving for retirement, education, or short-term needs?
- Risk Tolerance: How comfortable are you with potential fluctuations in value?
- Time Horizon: When will you need to access your funds?
- Financial Situation: How much can you afford to invest regularly?
- Market Outlook: Consider current economic conditions and market trends
- Fund Performance: Review historical performance, but remember past performance doesn't guarantee future results.
As your intermediary, we help analyze these factors and match you with suitable unit trusts from our partner fund managers.
Why Choose Laren Insurance Agency?
- Independent Advice: We compare multiple top fund managers to find you the best options
- Expert Guidance: Our team understands Kenyan market dynamics and regulatory requirements
- Simplified Process: We handle the paperwork and coordination with fund managers
- Ongoing Support: Regular portfolio reviews and adjustment recommendations
- Transparent Service: Clear explanations of all fees and charges
- Local Expertise: Deep understanding of the Kenyan investment landscape
Frequently Asked Questions
Laren acts as an intermediary that connects you with licensed fund managers. We provide advisory services and facilitate investments but don't manage the funds directly. The fund managers make investment decisions and manage the portfolios.
Yes, all unit trusts in Kenya are regulated by the Capital Markets Authority (CMA), which ensures proper governance, transparency, and investor protection standards are maintained.
You can redeem your units at any time. Money Market Funds typically offer same-day or next-day access, while other funds may have a processing time of 3-5 business days. Redemptions are processed at the prevailing unit price.
Unit trusts charge an annual management fee (typically 1-2% of assets) which is already factored into the unit price. As an intermediary, Laren may receive commissions from the fund managers. There are typically no additional charges to you for our advisory services.
All investments carry some risk. While Money Market Funds and Bond Funds have lower risk, Equity Funds can experience significant fluctuations. However, professional management and diversification help mitigate risks. Past performance doesn't guarantee future results.
We recommend reviewing your portfolio at least annually, or when your financial goals or circumstances change significantly. Our advisors provide regular reviews and recommendations for adjustments as needed.
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