On Tuesday 8th October 2019, the Capital Markets Authority hosted a breakfast meeting at the Golf course Hotel-Kampala to unveil a report conducted on the development and growth of the Collective Investment Scheme (CIS) Industry under Unit Trust Managers titled Unit Trust Manager’s Survey Report-September 2019.
The Collective Investment Scheme was established after the enactment of the Collective Investment Schemes Act of 2003.
According to the launched report, the CIS are managed under Unit Trust Managers and the current players in this field include UAP Old Mutual, ICEA, Stanlib, Xeno and Britam (who is new in the field). Collectively, the UTMs have Assets Under Management (AUM) amounting to the tune to Ugx. 157.6 Billion. https://cmauganda.co.ug/cmaic/cis/
A number of factors were noted to be stagnating the growth of the CIS industry and these included financial literacy, low levels of awareness, poor savings culture, inadequate distribution channels, lack of liberalization of the pension sector and many more as presented by the CMA-Director Research and Market, Mr. Dickson Ssembuya.
The report also cites several recommendations intended to curb the current limitations in the growth of the CIS industry as slow uptake of CIS in Uganda through creation of widespread awareness, and this was reiterated by Mr. David Ogong representing the CMA CEO Keith Kalyegira. In his opening remarks, he noted that there is need for awareness and urged everyone especially the media representatives, to be ambassadors in the move to growing the CIS industry.
The Management of CMA noted that there are currently existing gaps between the players in the CMA industry, however this will soon be dealt with as a plan to create the Unit Trust Manager’s Association underway.
So what’s in it for the investors?
Well, there is diversion of risks as investments are done in a number of assets, funds are managed by professional fund managers who are licensed and regulated by the Capital Markets Authority, access to wider variety of investments, affordability as you can invest small sums month on month, and no tax liability.
The only notable disadvantages are the loss of micro control and the asset management fee charged by the Unit Trust Managers and this differs from Unit Manager to Unit Manager.