Britam Money Market Fund Guide
Britam Money Market Fund is a low risk and high liquidity investment platform. This means that you will not lose your money invested, and it will grow its interest over time.
You can also access your funds any time, usually, within 3 working days. This will help you to either liquidate part of it or the entire amount.
Britam Money Market Fund is mainly invested in safety returns such as treasury bills, fixed deposit accounts and commercial bonds. This ensures safety of your finances, with a guarantee of getting your investments.
Britam has one of the biggest unit trust funds in Kenya, so it’s important to know about what types of Britam’s money market funds available to you.
In this guide, we’ll go over each type of Britam money market fund, from the basic Britam money market fund with low interest rates and a low risk level to the higher-risk but higher-interest Britam money market fund that more experienced investors can invest in.
Benefits of Britam Money Market Funds
- Fast withdrawal to your M-Pesa and bank accounts within 48 hours
- High interest rates
- Easily track your savings
Britam is an ideal source of investment for funds to meet short financial goals. For instance, you can save your money for emergency funds, school fees, car mortgage, construction projects and other types of short-term savings.
The Britam money market fund has been a solid performer since it was launched in 2010. The 2014-2015 financial year saw the fund grow by 8.7% while the 2015-2016 financial year saw it grow by 10.1%.
The 2016-2017 financial year is set to be even better with a projected growth of 12%. With this kind of performance, it is no wonder that people are investing more and more into this popular investment.
That’s great for those who want to start investing but don’t have enough cash lying around. There are also different types of investment available from just $10,000 so everyone can get involved!
Benefits of money market funds
A great advantage of money market funds such as Britam is that they are extremely liquid. They allow you to withdraw your investment on short notice because most financial institutions that offer these funds allow investors to redeem their shares at any time for their net asset value (NAV).
In other words, you can sell a mutual fund if it were a stock almost instantaneously and only pay a small transaction fee or no fee at all depending upon how long it has been since your purchase.
Furthermore, as with stocks and bonds there’s an expected rate of return in investing in a money market fund which means there’s the possibility that the value will increase over time.
However, when compared to other investments like CDs or bonds, these returns are quite low. Some people invest in these funds as a way of getting exposure to different types of securities without having to invest in individual stocks.
Others choose this type of fund because they want higher liquidity but don’t want the fluctuations found in more volatile investments like stocks and bonds.
Still others might choose money market funds as part of their emergency savings plan where quick access to cash is needed during turbulent economic times.
Britam money market fund interest rates
The best way to determine the interest rate of a Britam Unit Trust Fund is to take the previous six months of income and compare it to the total assets in the trust.
The more income there is relative to assets, the higher the rate. There are different ways to measure the interest rate on a Britam Unit Trust Fund: by taking 6-monthly income and dividing it by the total assets; or calculating the 12-monthly compound return.
For example, if an investor had $1 million invested with us for one year at an average 12-monthly compound return of 10% then their investment would grow by $10,000 (10000/1000000 x 1).
The Britam money market fund interest rates are typically given as a percentage annually, which is how you can calculate what your return will be.
If you have Ksh 300,000 in the bank for one year and the Britam money market fund interest rates are 2%, then after one year, you will have KSH 6000. However, Britam has an interest rate of 10 to 12% per annum.
The difference between our standard bank account and our high interest account is that with our standard bank account we may pay no interest depending on your balance over time but we do not limit access to your funds like some other banks do.
Britam Unit trust fund
The Britam Unit Trust Fund is an investment option that offers exposure to a wide range of assets in the global financial markets.
The Fund seeks to generate income and capital growth by investing in a diversified portfolio of assets and using derivatives for additional income.
The Fund invests primarily in bonds issued by governments or government agencies and other highly rated securities from around the world.
It also invests in global equity securities and currencies, including emerging markets. Investments are selected based on their long-term prospects for capital appreciation and yield.
These investments include stocks, bonds, convertible securities, currency and cash equivalents. The Fund is not subject to any geographical limitations on investments. As such, it has the flexibility to invest up to 100% of its assets in any one country.
Britam is a good place to invest your money, either with the money market fund or the Unit Trust Fund. The high interest rates, reliability and advantages of the market funds are all encouraging.