An investigation into unit trusts investment by savings and credit cooperative societies (SACCOS) in Nairobi

Abstract

The study establishes the attractiveness of unit trusts to SACCOs based in Nairobi. The hypothesis of the study was that unit trusts would be attractive to SACCOs. The expectation then was that SACCOs would include unit trusts in their investments in the current year. The study found slightly above average (51%) level of awareness among SACCO managers, and that only 20% had learnt of unit trusts from the promoters. In addition, of the 25 SACCOs aware of unit trusts, only 12 had discussed the probability of investing in unit trusts. Among the 12, ten had rated unit trusts as attractive, while only 2 had planned to include unit trusts in their portfolio in the current financial year. Based on the 80% positive rating by the 10 SACCOs whose MCs had appraised unit trusts as potential investments, the study concluded that unit trusts are attractive investment to SACCOs based in Nairobi. The study recommends that the Capital Markets Authority, Nairobi Stock Exchange and Unit Trusts Investment firms accelerate investor education to generate effective demand for unit trusts.