MERGENCE Lesotho has launched two unit trust investment products available to individual investors.
The unit trust investment products are the Mergence Lesotho Equity Unit Trust Fund and the Mergence Lesotho CPI + 4 Percent Fund.
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.
Semoli Mokhanoi, Managing Director of Mergence Lesotho, says the two Mergence unit trusts will go a long way to opening up investments for Basotho 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,” Mokhanui said.
“To date, very few asset managers are registered to promote unit trusts in Lesotho,” he said.
Mergence Lesotho has been licensed by the Central Bank of Lesotho under the Collective Investment Schemes Regulations.
“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,” Mokhanui 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.
Investors’ money is “pooled” and a professional fund manager then invests the pooled assets in a portfolio.
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.
As such, 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.
To invest in the Mergence Lesotho unit trusts you need to invest either a minimum lump sum of M500 or have a debit order of M100 per month.
The daily value of the unit trusts is published on Funds Data Online and investors get a detailed quarterly investment report.
In addition, regularly updated fund fact sheets give details of the underlying investments, risk profile and expected performance relative to the funds’ benchmarks.
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.
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.
Mergence Lesotho is invested on behalf of the country’s largest pension fund in local infrastructure and development projects.
This fund is focused with 80 percent of its investments in Lesotho and Mergence aims to launch a second private equity by September 2021, also aimed at institutional investors.