Staff Writer
Article from http://www.mmegi.bw/index.php?sid=4&aid=28&dir=2013/May/Friday10
Local asset manager, Bifm says retail and institutional investors have responded strongly to its recent launch of four unit trust products, signalling the market's hunger for safe, liquid and lucrative investment pathways.
Bifm's recent launch of Money Market, Balanced Prudential, Equity Fund and Offshore Fund unit trusts also came as some retail investors licked the wounds from a recent explosion of investment scams.On Wednesday, Bifm Head of Retail Setshwano Ngope told BusinessWeek the response to the local financial market's newest products had been "overwhelming".
"We are seeing overwhelming response from both institutional and retail investors, the latter ranging from the working class, to older people who are close to retirement and others who have already retired," she said."As much as we know that financial literacy is low in the market, we also know that there are investors who have money and don't know where to go.
While some may think that those who get involved in Ponzi schemes are stupid, we see it as a cry for help from them to say 'we have money to invest but we don't know how to go about it.'"At last week's launch, Bifm CEO Tiny Kgatlwane described unit trusts as an ideal investment opportunity for Batswana, "especially those that previously could not afford to invest large amounts in blue chip shares".
Ngope said institutional investors were also drawn to the unit trusts, viewing them as an alternative investment vehicle for excess cash that would normally be deposited in call or fixed deposit accounts.The strong response to the unit trusts is important, as NBIFRA's licence for asset firms to offer such products requires that the pooled fund reach a pre-determined size within a specific time frame.
Should a fund manager fail to reach the agreed milestones, it would have to return cap in hand to NBFIRA or face the possibility of losing its licence to operate a unit trust.Ngope revealed that Bifm acquired its licence last year and had already gathered momentum in the new product.
"We received our licence last year and our shareholder invested as well as our own staff members, as a pilot," she said."The unit trusts have thus been running in the background although they had not been officially launched until last week. We will soon be publishing prices of the units in the very near future, as the legislation requires that we do so."
The Bifm executive said there was space in the local unit trust market for the new products, as there had been growth in fund managers and products, since the first unit trust was launched 11 years ago."I would be surprised if we are the last entrant in the market," Ngope said.
"As much as there's a shortage of instruments in the market, I believe we will continue to find opportunities regardless of the size or choices. Over the years, there has been a push for more funds to be invested domestically and I expect that to boost the market and for more instruments to be issued."
She added that the uptake of financial products such as unit trusts would continue rising as financial literacy levels improved. Bifm plans to engage potential investors further to educate them on the various products available to them.
MBONGENI MGUNI
Staff Writer
Article from http://www.mmegi.bw/index.php?sid=4&aid=28&dir=2013/May/Friday10
