Moses Rutahigwa, Standard Chartered Bank’s Head, Wealth, and Retail Bank shares with us how easy it is to get started and make your money work for you though mutual funds.
Q: Please explain to us how a mutual fund works, in this case relating to your offering.
A: Key Features of Mutual Funds
- Pooling of Resources: Investors buy shares in the mutual fund, and their money is combined with that of other investors. This allows for greater purchasing power and diversification.
- Diversification: By investing in a variety of securities, mutual funds reduce the risk associated with individual investments. This means that poor performance by one investment can be offset by better performance by others.
- Professional Management: Fund managers analyse and select the securities in the fund’s portfolio, making investment decisions based on research and market conditions.
- Liquidity: Investors can typically buy or sell shares of the mutual fund on any business day at the current net asset value (NAV), making it a relatively liquid investment.
Q: What type of investor is best suited for your mutual funds?
1. First time investor
2. Investors looking to create multiple streams of income
3. Portfolio diversification
Q: Can you provide an overview of your mutual fund offerings and how they fit within the current market landscape?
A: There are several types of mutual funds, including:
- Equity Funds: Invest primarily in stocks.
- Bond Funds: Invest in bonds and other fixed-income securities.
- Balanced Funds: Invest in a mix of stocks and bonds.
- Money Market Funds: Invest in short-term, low-risk securities.
- Index Funds: Aim to replicate the performance of a specific market index.
Q: How can I invest in your mutual fund? How much do I need?
A: Minimum lump-sum investment amount is $2000(approx. BWP30k) and $200 (approx. BWP3k) as a recurring savings plan.
Q: What securities are included in your mutual funds and how do you select them?
A: Fund factsheet as well as prospectus will show securities
Q: Who manages the mutual fund and how is it managed?
A: Mutual funds are managed by the Investment fund House managers.
Typically taking an annual management fee (Most fund managers take between 1-1.5% Pa)
Q: Can you explain the fee structure of your mutual funds and how it impacts investor returns? If possible, compared to other investment instruments like unit trusts or retail bonds.
A: Most funds will charge annual management fees however it is important to note other fees such as sales load which is a commission paid.
Some funds also charge a performance fee and all this will affect investors ROI.
Q: What is the typical holding period for assets within your funds?
A: The typical holding period for assets within a mutual fund vary depending on the investment strategy and objectives.
Equity funds typically have a longer holding period of 3-5 years whereas bond funds holding short term bonds may have duration of 1-3 years.
Q: Has there been any instances where fund performance did not meet expectations? How did you address that with investors?
A: Customers are constantly engaged on the performance of their funds through monthly investment statements shared by the bank.
In instance where a fund is not performing what typically would happen is a client may switch to a different fund with guidance from banks financial advisor.
Q: How do you adapt your investment strategies in response to changing market conditions?
A: Diversification i.e. geographic as well as asset allocation. Re-asses investor risk tolerance every 24 months (update of customer investment profile).
Q: What steps do you take to protect investors’ interests?
A: Transparency and disclosure. Regular portfolio reviews
Q: What innovations or trends are you seeing in the mutual fund industry that you think will shape the future?
A: AI and use of Robo Advisors
Q: Are there any specific sustainability initiatives or goals your funds are pursuing?
A: We do offer ESG funds
