What are Unit Trusts?
Unit trusts are investments where investors’ money is pooled together and invested in a range of securities (eg. Shares, bonds). Unit Trusts are usually managed by a professional Fund Manager.
What are the benefits of investing in unit trusts?
Diversification & Reduction of risk: An investor’s risk exposure is reduced by way of diversification. Investors’ money is always spread across different investment instruments, or within the same category of instrument, but still across different entities. E.g: An Equity fund can diversify by buying shares of different companies.
Affordability: Because unit trusts are pooled or collective investment schemes, investors don’t need to have already accumulated large amounts of money to invest in them. At Bifm, investors can begin investing from as little as P200 per month.
Access to Professionals: Unit trusts are managed by experienced and professional fund managers. While you may not necessarily be clued up on stock market investing, at Bifm you can trust that your money is being managed by experienced and knowledgeable professionals who have the expertise to manage your unit trust fund.
Flexibility: Bifm Unit Trusts offer investors great flexibility in terms of how they invest, how long they invest, and for what purposes they invest. Investors get to decide what their frequency of contribution will be (once-off, monthly or ad-hoc). It is also the investor’s prerogative to decide how long they wish to have their money invested, and lastly, investors can invest in the Bifm unit trusts for many reasons eg, Emergency fund, Holiday fund, School fees, Asset acquisition, general saving etc.
Exposure to Different Assets & Markets: The pooling together of investors’ funds allows investors exposure to different investment securities some of which investors might not have been able to access were they to go direct to the issuer. As in the case of Bifm, unit trusts can also give you exposure to different markets.
Liquidity: Bifm Unit Trusts are highly liquid and allow investors access to their money within 72 hours.
How can I invest in Unit Trusts?
Investing in the Bifm unit trusts is very easy! In addition to the Application Form, to begin investing you will also need the following:
- Certified copy of your ID (or passport for expatriates)
- Proof of your residential address (this should not be older than 3 months)
- Proof of your banking details (bank statement)
If you’re opening the account on behalf of someone else, you will also need to provide:
- Certified copy of their ID
- Passport for expatriates or
- birth certificate for minors.
Who can invest with Bifm Unit Trusts?
Individual Clients: As long as you have a local bank account and are resident in Botswana you can invest with us. Contact us for more information on +267 3951564 or RetailServices@bifm.co.bw
What is the procedure for changing or updating investor details?
If you are a single applicant, you may issue an instruction by completing the ‘Update Investor Details Form’ and send it to UTinstructions@ut.bifm.co.bw. please remember to include the required documents as per the notes on the form.
Why do I need to provide KYC documents?
The Financial Intelligence Regulations 2019 of Botswana require all specified institutions – i.e. financial institutions – to identify, verify and keep records of all clients with whom they establish a business relationship. This is to combat money laundering activities and fraud in Botswana, and to protect the interests of legitimate investors.
Can I invest in unit trusts on behalf of my children?
You can open a unit trust investment for your children, spouse, distant relative and even for a friend.
Speak to our Retail Services team to get more information of what documents you would need in order to invest for someone else.
How much does it cost to invest?
Depending on the fund(s) you choose to invest in, you may incur Initial fees of up to 5% (excl VAT), as a once off fee.
Annual management fees on our unit trust funds range from 1% - 2% per annum.
Do I need a lot of money to invest?
Investing in the Bifm unit trust funds is quite affordable for most people. The minimum amount for an initial lump sum investment into one of our Bifm Unit Trusts is P1,000. For regular contributions, the minimum is just P200 per month.
How can I upgrade to transact on my portfolio?
To upgrade to transact on your portfolio a copy of your Identity document and Proof of address will be required to ensure security. Please call the Bifm Unit Trusts Office for more details.
Is income received by unit trust funds taxable?
Dividend income received by the fund is subject to dividend tax, and interest income is subject to withholding tax of 10% for residents and 15% for non-residents. Capital gains realised are tax-exempt.
Why is the inception date different to my original start date?
If you have been invested with us prior to 12 November 2018, your inception date will reflect as 12 November 2018. This signifies the date that we migrated to our current systems. Rest assured that your current portfolio value reflects all the gains and contributions you have made since you’ve been invested with us.
Why is my Fund Return different to my Investment Return?
The Fund Return is the total return achieved due to the portfolio manager’s actions over the reporting period. The Fund Return is influenced by market performance and can differ from the Investment Return as it is not does not take into account the timing of your investments. This includes your inflows and outflows within the fund. You can view the fund return on the fund fact sheet.
Why is no data available for my Asset Allocation and Top 10 holdings?
The fund that you are looking at may only have been launched within the last three months.
What is Available Units?
These are all the cleared units that have been credited to your account. This may differ from your Total units due to units yet to be cleared.
What is Total Units?
All the units that have been credited to your account, irrespective of whether they have been cleared or not.
What is TER (Total Expenditure Ratio)?
The Total Expenditure Ratio (TER) is a measure of the total costs associated with managing and operating the investment product, i.e. unit trust fund.
What is an Income Distribution?
An Income Distribution refers to interest and dividends that a fund receives based on the assets it has invested in. The investor may choose for the income to be reinvested or paid out to their bank account.
What is a Unit Price?
A unit price is the price of a single unit and is determined by the valuations of the underlying assets (i.e. shares, bonds etc.) in the unit trust fund. This is also referred to as the Net Asset Value (NAV),
This is calculated as the market value of the assets held by the fund minus the market value of liabilities (i.e. fund management fees, VAT, transaction costs of buying and selling etc.), at a specific time.
Total Investment Value vs Total Available Value, why do these differ?
The Total Available Value can differ from your Total Investment Value due to a clearing period of 4 working days for debit orders and once off debit collections. After the clearing period has lapsed your Total Investment Value and Total Available Value will be equal.
Are there penalties to exit a Unit Trust?
No, however withdrawals, transfers and switches out of a Fund are subject to unit price movements. Investors may realise capital loss if should they transact at a time when the unit price of the fund has declined.