Old Mutual Unit Trust Company (Malawi) Limited, the first open-ended collective investment scheme, says it wants to see its investments hitting the K1 billion mark by December 2012.
Unit Trust, a subsidiary of the Malawi Stock Exchange (MSE)-listed Old Mutual plc (OML), came to Malawi in September 2011 and is currently serving two productsâ€”balanced fund and money market fund.
Also known as mutual funds, particularly in the USA, unit trusts are popular investment vehicles for both corporate and individual investors worldwide because they pool investments in a collective investment vehicle.
Smaller investors can achieve the benefits of a diversified portfolio and economies of scale and the Trust structure is relatively low risk and provides security and safety for investors.
Speaking to journalists on Wednesday in Blantyre, Old Mutual Unit Trust Company (Malawi) Limited chairperson, South Africa-based Peter De Beyer, said in the first six months of 2012, they have seen steady progress in the investment vehicle and the fund is at around K400 million (about $1.3m).
â€œMalawi has gone through some tough economic times over the last number of months and this has impacted on us and many other businesses, but we are happy with the progress that has been made during 2012.
â€œThe business continues to grow and the biggest challenge to growing the business is that, as the first unit trust company, the first set of unit products in Malawi, we really have a big task in educating the public about these new products and about the benefits of these products. The take up has been constrained by the tough task of educating the public,â€ said De Beyer.
He, however, observed that the company has now started to reach the wider public and that people are now appreciating the benefits of the products.
Old Mutual Unit Trust was incorporated in 2009 and was awarded an operating licence by the Reserve Bank of Malawi (RBM) in March 2011. The companyâ€™s products were opened to the public on September 1 2011.
â€œThere were, of course, challenges in initiating a new industry in Malawi. Firstly, the enabling
legislation needed to be put in place, together with the appropriate regulatory capability,â€ said De Beyer, adding that at the end of 2011. They had 30 clients collectively having investment assets of nearly K300 million (about $1m).
He urged the authorities to ensure that the tax regime for unit trusts in Malawi is made unambiguous and brought in line with international norms within the overall Malawian tax structure.
â€œForex shortages seriously challenged our initial operations, as we are necessarily dependent on certain support and services from abroad. The recent changes have eased this situation somewhat, but clearly impacted on our set-up costs,â€ he noted.
The company held its first annual general meeting (AGM) in Blantyre on Tuesday.