Unit Trust is a collective investment scheme where your money is pooled with other investors, and professional fund managers invest it for you. Here are the key terms you’ll see in Uganda, especially with CMA-regulated funds: 1. Core Structure Terms Unit / Units: The “shares” you buy into the fund. Your number of units = your share of the pooled fund. The value changes daily based on NAV. - NAV - Net Asset Value: The daily price per unit, calculated from the total value of all fund assets ÷ total units. This is what you buy/sell at. - Fund Manager: The CMA-licensed professional who decides what to invest in — bonds, T-bills, shares, deposits, etc. - Trustee: Holds the fund’s assets on your behalf, separate from the manager. Checks that everything is done by law. - Custodian: Usually a bank that safekeeps the actual securities/cash. 806df1077bd7 2. Types of Unit Trusts in Uganda Most providers like SBG Securities & Old Mutual offer 3 main types: - Money Market Fund: Short-term, low risk. Invests in T-bills, bank deposits, commercial paper. Good for emergency funds. - Bond Fund: Medium to long-term. Focuses on government & corporate bonds. - *Balanced Fund*: Mix of fixed income + equities/shares. Higher growth potential, more volatility. 3. Key Investment Terms - Minimum Investment: Often as low as UGX 100,000 to start, same for top-ups. Dollar funds start at USD 1,000. - Liquidity / Redemption: How fast you can withdraw. Most Uganda funds do T+2, i.e. within 2 business days. Some SBG funds say within 24 hours. - Daily Compounding: Returns are calculated daily and reinvested, so “money you earn today starts working for you again tomorrow”. - Diversification: Risk is spread across many assets vs you investing in just one stock/bond. -Bid/Offer/NAV Price: Bid = price when you sell back. Offer = price to buy. Single NAV price is common in Uganda funds. 4. Risk & Regulation Terms - CMA Regulated: All unit trusts in Uganda are licensed by the Capital Markets Authority for investor protection. - Risk Profile: Low-risk funds mainly hold gov’t T-bills/bonds. Returns can still fluctuate with markets. Capital is not 100% guaranteed. - Fees: Fund manager gets a management fee, usually % of assets. Ask for the Total Expense Ratio before investing. 5. Practical Terms - Top-ups: You can add more money anytime. - Income vs Capital Growth: Returns come from interest/dividends + increase in unit value. - Tax-efficient: Some dollar unit trusts are marketed as tax-efficient. Quick example: Put UGX 1,000,000 in a fund returning ∼12% = ~UGX 120,000/year. But rates vary by fund and year. #investment #unittrust #uganda #fyp #motivation - @apuulibabigumira