By Staff Reporter
Mergence Lesotho has launched two unit trust investment products available to individual investors: the Mergence Lesotho Equity Unit Trust Fund and the Mergence Lesotho CPI + 4% Fund.
Mergence Investment Managers (Lesotho) Limited is part of the Mergence Group, a diversified financial services holding company founded in South Africa in 2004. Its Lesotho office was officially opened by the finance minister on August 23 2018 and is staffed by Basotho citizens.
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 & 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.
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.
The managing director of Mergence Lesotho, Semoli Mokhanoi, says that the two Mergence unit trusts will go a long way to opening up investments for the Basotho people 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.
“To date, very few asset managers are registered to promote unit trusts in Lesotho. We are proud to say that Mergence is now licensed by the Registrar under the Central Bank of Lesotho (Collective Investment Schemes) Regulations, 2018, to make unit trusts available. 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,” Mokhanoi said.
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 (www.fundsdata.co.za) 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.
The launch of the Lesotho-registered unit trusts builds on Mergence’s existing strong investment track record in Lesotho since 2015. Through a large private equity fund, Mergence is invested on behalf of the country’s largest pension fund in local infrastructure & 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.
According to Mokhanoi, “While these larger, private equity funds are not open for the public to invest in, many retirement fund members can rest assured that their hard-earned retirement savings are invested in projects in line with the Mergence group ethos of creating shared value, in order to make a positive impact on communities and contribute to economic growth.”
