A unit trust, also known as a collective investment scheme or a mutual fund is a professionally managed investment fund in which investors’ contributions are pooled together to purchase financial securities, such as equities (shares), bonds, bank deposits etc. In Kenya, unit trust funds are regulated by the Capital Markets Authority (CMA).
Increased Diversification - A fund normally holds many financial securities; diversification decreases risk.
Daily Liquidity - Unit holders can buy and sell their units on a daily basis.
Professional investment management - Unit trust funds hire portfolio managers to supervise the fund’s investments.
Accessibility - Ability to participate in investments that may be available only to larger investors. For example, individual investors often find it difficult to invest directly in foreign markets.
Regulatory Oversight - Unit trust funds are regulated by the Capital Markets Authority.
Ease of Comparison - All mutual funds are required to report the same information to investors, which makes them easy to compare.