JSC Conversations: Expert explains how unit trust funds build wealth

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Ugandans looking for ways to grow their savings may need to rethink traditional investment habits, according to an expert who spoke during a recent Judicial Service Conversations (JSC Conversations) X Space.

Hosted by lawyer Elison Karuhanga, the weekly discussion featured Ashiraf Mugabe, Unit Manager at Old Mutual Investment Group and a senior financial investment and risk advisor, who broke down how unit trust funds work and whether they can genuinely build wealth.

Judicial Service Conversations (JSC Conversations) X Space was hosted by Counsel Elison Karuhanga. (Courtesy photo)

In simple terms, Mugabe described a unit trust fund as a collective investment scheme where individuals pool money that is professionally invested to generate returns.

“A unit trust fund is like an account where you put your money to earn returns on a daily basis,” Mugabe explained. “Instead of letting money sit idle in a bank account, the fund manager invests it so that it continues to grow.”

Unit trust funds in Uganda are regulated by the Capital Markets Authority (CMA) and operate through a structured system involving several players, including fund managers, trustees, custodians, auditors and the investors themselves, known as unit holders.

According to Mugabe, the sector has grown significantly in recent years. Old Mutual, one of the leading players in the market, currently manages about sh4.8 trillion in unit trust investments.

Ashiraf Mugabe, Unit Manager at Old Mutual Investment Group and a senior financial investment and risk advisor, speaking during the Judicial Service Conversations (JSC Conversations) X Space. (Courtesy photo)

The growing interest reflects a shift in how Ugandans are thinking about investments. Traditionally, many investors preferred assets such as land, real estate or informal savings groups. While these remain popular, Mugabe argued that unit trusts offer an alternative, especially for people who want flexible investments without the burden of managing businesses or property.

“Instead of keeping money under the bed or waiting years to accumulate a large amount, the money you save can earn interest while you continue adding to it,” he said.

He explained that this allows investors to reach financial targets faster because returns are compounded over time, meaning the interest itself begins to earn interest.

During the discussion, Mugabe shared a case where a former Member of Parliament (MP) restructured his finances by selling a high-value property and investing the proceeds into a unit trust fund. The investment now generates about sh10m monthly income, effectively replacing a salary.

The conversation also addressed a common misconception that visible assets, such as land or buildings, are always superior investments.

The JSC Conversations platform brings together legal professionals and experts every Wednesday on X (formerly Twitter). Hosted by Karuhanga, it discusses various topics, including legal matters and finance. (Courtesy photo)

“People like assets they can see,” Mugabe noted. “But sometimes the numbers show that a financial investment can deliver stronger and more consistent returns.”

He encouraged professionals to carefully assess their financial goals before choosing investments, especially if they have demanding careers that limit their ability to run side businesses.

The JSC Conversations platform brings together legal professionals and experts every Wednesday on X (formerly Twitter). Hosted by Karuhanga, it discusses various topics, including legal matters and finance.