Category: Investments


Understanding Unit Trusts

What are Unit Trust?

A unit trust is a fund composed of investors’ money, which is invested in a variety of financial assets.
When you invest in a unit trust, your money is pooled by a fund manager, with that of other investors’ to form a fund, and invested into various assets such as shares, bonds and money market instruments or other authorized securities to achieve the objectives of the fund.

Each investor receives units depending on the size and value of his/her investment. The underlying value of the assets of a Unit Trust is always directly represented by the total number of units issued multiplied by the unit price less the transaction or management fee charged and any other associated costs.
Trust Units returns range between 10% to 15%

How a Unit Trust Works

Investors buy units through the fund manager at the prevailing selling price (calculated daily). These units can be bought any time as long as the fund has not reached its maximum approved size. Unit holders can also sell their units back to the fund manager at the prevailing buying price. This re-purchase feature is what makes the units to be referred to as open-ended funds. The fund manager not only issues new units to incoming investors, they are also required to repurchase or redeem units from outgoing investors. The value of the fund or the price to be paid by unit holders or the amount to be received when the units are sold is based on the net asset value of the fund plus charges (if any).

It is important to note that in the case of funds where a substantial portion is invested in stocks and shares, the performance of the fund would be affected by the performance of the stock market. Hence, a unit holders selling price could either be higher or lower relative to the stock market’s performance when units were bought.

How Unit Trust Fund earn income

Investors in unit trusts earn money through either capital growth or dividend income. Each unit in the fund represents a slice or share of the fund’s underlying portfolio of securities. Therefore if the value of the portfolio goes up, so does the value of each unit. This is called capital growth, or capital appreciation. If one sells the units at a higher price than they bought, a profit would be made. The converse will mean a loss is incurred if the units are sold for less than the price at which they were bought.

Any income received by the fund from its investments may be passed on to unit holders as dividends. However, dividends are not guaranteed if the fund makes little or no income. In such a case, the fund may not pay any dividend. Moreover, a fund that concentrates on achieving capital growth may have a policy of paying very little or no dividend at all. In such cases you may have to sell your units if you need to redeem some cash.

It is therefore important to read the prospectus to find out the type of fund being offered and whether it matches your investment objectives.

How to Select a Unit Trust

The fund’s investment objective and strategy, investment limits, its current portfolio and any commentary on its recent performance. This should also give you a rough idea of the risk level of the fund.
Check the past performance of the fund. Do not pay too much attention to periods of a year or shorter.
Look for good and consistent performance over the longer term. Be warned that the past success of a fund is no guarantee of good performance in the future.
See if there are any specific features and constraints which may conflict your needs or preferences. For example, the fund may have a policy of not distributing dividends, the minimum investment required may be higher than what you want to invest or the procedures for buying and selling of units in the fund may be inconvenient.
When deciding which fund to invest, you should also look for information on the shareholders, board of directors and key management staff of the fund manager.
You should assess the financial strength, track record and expertise of the company and its staff.

Types of Unit Trusts

  • Money Market Fund
  • Balanced Fund
  • Equity Fund
  • Bond Fund



When buying land in Kenya one should be conversant with some technical terms and standards.

If you don’t have experience and knowledge in land matters then, it will be advisable to be assisted by someone like a lawyer.


In Kenya land is measured in hectares, meters or feet.


A plot is a marked out piece of Land for the purpose of building or farming. The word ‘plot’ is an arbitrary term used to describe a land division carved out for property development.

The standard measurements of a plot is 100 by 50 feet which can accommodate a house and a small compound.


An hectare is measured in meters.

1 hectare = 1000 by 1000 meters. It’s an equivalent of 328 by 328 feet.

A Hectare consist of 15 plots with access roads includes.