Unit trust investment option for Basotho

MATHATISI SEBUSI 

MASERU – Mergence Lesotho will launch unit trust investment products available to individual investors. The investment products, Mergence Lesotho Equity Unit Trust Fund and Mergence Lesotho CPI + 4% Fund, give Basotho an opportunity to invest from as little as a minimum lump sum of M500 or a debit order of M100 per month. In a statement, Managing Director of Mergence Lesotho, Semoli Mokhanoi, said a unit trust allows the man in the street to have easy access to professionally managed funds by buying a portion of the fund, known as a unit.

He said investors’ money is “pooled” and a professional fund manager then invests the pooled assets in a portfolio, adding that the portfolio is invested across a selection of asset classes which could include the shares of listed companies, cash, bonds and deposits, properties and commodities.

Mokhanoi said as a result, investors can get access to a wide range of investments that would not normally be available to them. “In the long run, unit trusts should produce returns higher than cash savings and fixed deposit investments. While investors can sell (redeem) their units whenever they want, to achieve these higher returns it is generally recommended that their money is kept in the unit trusts for a minimum of three to five years.

“The Mergence Lesotho unit trusts have been launched on the back of the asset manager’s strong track record in Lesotho since 2015, as well as the company’s success in managing unit trusts in South Africa since 2010,” reads Mergence Lesotho’s statement. Mokhanoi further noted that the two Mergence unit trusts will go a long way to opening up investments for the Basotho people who wish to save for their future.

“The main saving that most people make is into their company’s retirement fund, but if you have spare cash available for other investments, unit trusts offer a neat way to invest additional money to grow your retirement savings. “To date, very few asset managers are registered to promote unit trusts in Lesotho. We are proud to say that Mergence is now licensed by the Registrar under the Central Bank of Lesotho (Collective Investment Schemes) Regulations, 2018, to make unit trusts available.

“There is a growing retail market for investments in Lesotho and this means that Basotho citizens now have a choice of unit trust funds which are registered in Lesotho,” he said. He added that in terms of a risk-return profile, the Mergence Lesotho Equity Unit Trust Fund has a slant to equity/share investments and is medium- to high-risk, pointing out that the Mergence Lesotho CPI + 4% has an absolute return orientation and a lower risk profile.

Mergence Investment Managers (Lesotho) Limited is part of the Mergence Group, a diversified financial services holding company founded in South Africa in 2004. Our Lesotho office was officially opened by the Finance Minister on 23 August 2018 and is staffed by Basotho citizens. The launch of the Lesotho-registered unit trusts builds on Mergence’s existing strong investment track record in Lesotho since 2015. Through a large private equity fund, Mergence is invested on behalf of the country’s largest pension fund in local infrastructure and development projects. This fund is focused with 80% of its investments in Lesotho and Mergence aims to launch a second private equity by September 2021, also aimed at institutional investors.