Unit Trust Fund as a savings plan for long term and short term

We often come across the word saving and investing multiple times in our interactions.

By Old Mutual Investment Group

Whether it is saving for a long term goal such as buying a home; a trust fund for your child; an emergency fund or a short one like a vacation or a new couch. During the current Covid pandemic,the importance of having some money saved away in order to cushion ourselves from uncertainty has come to the fore. While saving is a vital stepping stone towards financial freedom, investing is a better way to get our money to grow for us when we aren’t in use of it.

When it comes to investments, the interest rate is higher than you’d get if you only put your money in a savings account. Investments are roughly broken down into two categories: low risk investments and high risk investments. Low risk investments require less commitment as you can pull out your money at any time but normally have lower return than high risk investment returns. However, with the low risk investments, there is a guarantee that you will receive back your starting capital plus some interest. These low risk investments include; Government bonds and company papers.

On the other hand, high risk investments require very high, long term commitment in order to see the greater benefit. Such as; investing in stocks. While these kinds of investments can be very risky due to short term market fluctuations that can see an investment like stocks fall, they can be highly rewarding once they are allowed to mature for a very long time. This ensures that the short term losses can be covered by the gains in the long term as they withstand the test of time. 

In order to be able to dabble in high risk investments, it is important to understand the process by starting out with low risk investments. Not only is one able to gain some knowledge but also measure their patience and commitment levels. Additionally, one is able to pool a good amount of money to invest into high risk investments. Having money readily available when the opportunity arises can put you in an advantaged position. Plus, the higher rates that investments offer encourage one to improve their financial discipline when it comes to saving and investing. This is where unit trusts can come in handy to aid your investment goals.

Similarly, Unit trust funds have low, medium and high risk investment channels that allow one to invest in Treasury Bills, company papers, government bonds and corporate bonds. At UAP Old Mutual, we offer these unit trust funds whether as a single applicant, joint account holders or as corporate clients. We can help you find the best unit fund for you depending on your needs. It is best to have a goal in mind, know your risk appetite in case there is a short term fall in the market as well as knowing your timeline to reach the goal you’re aiming for. All channels allow one to secure a loan and have recommended timelines to mature. We offer the following unit trust fund channels;

  1. Old Mutual Bond Fund- this a medium risk fund that is used to invest in debts and other debt securities.
  2. Old Mutual Balanced Fund-. Is a medium risk fund that contains a mix of stocks and bonds as well as a money market component at times.
  3. Old Mutual Equity Fund- this is a high risk fund that invests in stocks, also called equity securities. Your investments will be channelled to select Shares, Fixed deposits, Corporate and Treasury Bonds which creates a high-risk, high-returns portfolio.
  4. Old Mutual Money Market Fund- allows one to invest in short term, high credit quality debt securities such as treasury bills and commercial paper.

 You can find out which unit trust fund channel fits your needs by simply dialing *480# on your mobile phone or through our Arifa bot on Facebook Messenger. We will guide you through the process as you discover new ways to make your money work for you

Fund Prices
Old Mutual Money Market Fund Daily Yield : 7.09%  Annual Rate: 7.33%
Old Mutual Equity Fund Buying Price: 388.75  Selling Price: 388.75
Old Mutual Balanced Fund/Toboa Buying Price: 146.02  Selling Price: 146.02
Old Mutual Bond Fund Buying Price: 100.17  Selling Price: 100.17

Fund Prices

Fund Prices at 26th October 2021

Fund Name Currency Daily Yield Effective Annual Rate
Old Mutual Money Market Fund Kenya Shillings 7.09% 7.33%
Fund Name Currency Buying Price Selling Price
Old Mutual Equity Fund Kenya Shilling 388.75 388.75
Old Mutual Balanced Fund/Toboa Kenya Shillings 146.02 146.02
Old Mutual Bond Fund Kenya Shillings 100.17 100.17

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