Britam Boosts Collective Investment Schemes with Short-Term Fixed Interest

Savers with Britam Asset Managers Uganda can now access their funds as and when they opt to, on top of a short-term interest on their fixed-tenor investments for a pre-determined time.

This follows the launch of the Fixed Income Money Market Fund (FIMMF) dubbed Britam Easy Earner, with the promise of competitive interest rates, according to Britam Assets General Manager Ronald Kasolo.

The package is a collective savings scheme, with a relatively low-risk investment, which will offer investors a stable return for specified tenures varying from three, six, and 12 months with a possibility of an extension.

This is in response to the changing demands and terrain of the market as more people seek flexible financial products that also offer decent returns, a challenge for players to keep innovating for the varying client needs.

“This particular product covers both the short to medium-term investors given the different investment tenures. If someone can fix a given amount of money for only three months, we are ready to serve you. If you want to fix money for 12 months we have you covered as well,” said Kasolo.

FIMMF allows investors to access their cash when they need it with flexible withdrawals within 72 hours.

In this particular one, customers can invest the fund at Britam branches, with minimum subscription amounts of five million Shillings and a minimum top-up of two million Shillings.

Launched in 2017, Britam Asset Managers accounts for 12 per cent of the industry’s Assets Under Management. According to the Capital Markets Authority, CMA, Collective Investments Schemes assets now total more than 1.8 trillion Shillings, from 21 billion just five years ago.

CMA Chief Executive Officer, Keith Kalyegira says the high growth rate is due to the increasing number of asset managers, a regulatory framework that guarantees the safety of the investments, a good tax regime and sensitization drives. He says that while investing in equities on the stock market might not be very profitable to an ordinary individual in Uganda because of the high costs, it is easier and better through CISs.

Britam Easy Earner is designed to serve the needs of investors whose primary goal is to minimize investment volatility and earn a stable return on their investment portfolio which is protected from various taxes.

“One of the major benefits we are offering to our clients through this product is tax efficiency. The interest earned will not be subjected to withholding tax,” said Kasolo, adding that the company invests the money in many products making it more profitable and safer.

“The product offers investment diversity, encompassing investment areas such as money markets securities, including government treasury bills and fixed income securities such as government treasury bonds.”

Britam Easy Earner can serve monthly savers, parents seeking low to medium-risk annual returns as they save for their children’s education, and high networth individuals looking to diversify investments, among others. Corporates and SMEs also stand to gain from the fixed-income money market fund.

They can invest part of their revenue reserves and funds lying idle in bank accounts. Uganda now has more than 60,000 CIS accounts, but Kalyegira says this is too low compared to countries like Ghana where there are more than 900,000 CIS accounts.