The basic idea

A unit trust pools money from many investors and invests it, as one large portfolio, in a mix of assets such as government securities, corporate bonds, listed shares, or fixed deposits — depending on the fund's stated objective. In Tanzania, UTT AMIS is a well-known unit trust manager offering several such funds.

Units, not shares

When you invest, you buy "units" of the fund at its current Net Asset Value (NAV) per unit. As the fund's underlying investments change in value, so does the NAV, and therefore the value of your units.

Why use a fund instead of investing directly

• Diversification — your money is spread across many underlying investments, even with a small amount.
• Professional management — a fund manager researches and selects investments on your behalf.
• Accessibility — minimum investment amounts are often much lower than what you'd need to build a diversified portfolio yourself.

The trade-off

Funds charge a management fee (covered in a later lesson), which reduces your net return compared to the fund's gross performance. You're also trusting the fund manager's decisions rather than making them yourself.

Where to see funds in this app

The Investments → Funds section lists available funds by type (money market, bond, balanced, and more) along with their latest performance data.