FREQUENTLY ASKED QUESTIONS

What is a Unit Trust?

A Unit Trust offers a way for individuals to pool their money together and use a professional Fund Manager to access investments such as Treasury Bills, Government Bonds, shares and other income generating securities.

Unit Trusts have become one of the most popular personal investments because they are uncomplicated as an ordinary bank account with similar levels of flexibility but are designed to maximize returns. Historically, Unit Trusts have given the investor superior returns in the long term.

Who Participates in the Unit Trust
Unit Holders-Individual investors who invest in the scheme.
Trustee-Holds ownership of the assets on behalf of the Unit Holders.
Custodian-Keeps custody (safe-keeping) of all assets if the Trust.
Management Company-the carring out of the investment of the Unit Trust is done by skilled and professional fund managers who are duly licenced by the Securities and Exchange Commission of Zambia.
Backed by sound research capabilities,their fulltime occupation is to generate maxiumum returns on the investor’s money. Hobbiton Balanced Fund What are the Benefits of Investing a Unit Trust
Unit trusts are a cost-effective way to access a share portfolio.
You get full-time professional management of your money.
Unit trusts are flexible and transparent. Investors are not tied in and can access their money at any time.
Unit trusts are one of the most tax-efficient ways of investing (providing tax exemptions on interest income, capital gains tax exemptions).
Unit trusts continue to offer exciting capital growth opportunities over the medium to long term.
How do Unit Trusts Make Money

A Unit Trust makes money in two ways,namely; Firstly, through an increase in value of the units held in the fund.As the value of the investments and securities held in the fund increases,so does the value of the units held by the individual Unit Holders.This is know as unit appreciation. Secondly,the profits earned by the fund are passed on to the investor through periodic distributions made from income received through interest accrused from bonds,treasury bills and other money market instruments as well dividends from shares held by the fund.

How Secure is the Investment

The Hobbiton Unit Trust is authorised,regulated and monitored by the Securities and Exchange Commision of Zambia,a financial market regulator established under the Securities Act [Cap 354] of the Laws of Zambia. All invetsments of the Hobbiton Unit Trust are carried out with the involvement of an independent Custodian,who is part of a leading international Bank.Their riole is to provide safe custody of the assets. The Hobbiton Unit Trust is overseen by an indepedent trustee.

The Hobbiton Unit Trust is audited at the end of each financial year as per requirements of the Securities Act. The professional investment managers at Hobbiton Investment Management Limuted have undergone specialised training in areas such as Risk in Asset Management.

What is the minimum deposit

Monthly Investment – K50.00 - Annual Lumpsum investment – K600.00 - Minimum Investment Period – 6 Months *Note that your are free to increase the amount invested from time to time depending on your liquidity.There is no maximum amount.

How do I know that I have invested my money?

If you are investing a lump sum, we will send you a welcome letter showing the number of units you have, and the price and date on which you bought them. We will post this statement on the next business day after the date of your investment. We shall issue Unit Certificates and send you statements every month showing the units you own and the value of your investment.

If you set up a monthly savings plan, we will collect your monthly contribution by direct debit on the day that you indicated on the application form, or on the next working day. Units are bought on the same day as payment is received. If you have paid via cheque, units will be purchased once the cheque has been cleared. Statements are sent every month.

What Charges Apply?

The Fees Structure below applies for Hobbiton Unit Trust Fund Collective Investment scheme;
Fund Management Fee
rustee Fee
Custodian Fee
EC CIS Levy

What information and feedback do investors receive?

The investors receive annual statements giving details of their units, fund growth, income distribution. Interim statements can also be issued upon request.

An Annual Report is sent out to all Unit holders every year giving a summary of the Fund’s Investments and prospects by the Management Company and accompanied by Audited Financial Statements. An Annual General Meeting of Unit Holders is held to present and discuss the Annual Report which includes the Audited Financials and the Management Companies Report.

Units Transactions

Confirmation of Investment After we received your payment, application form and the relevant document(s), we will issue a system generated receipt and a units purchase certificate.

Repurchase of Units or redemption You may redeemed all or any parts of your units on any Business Day subject to submitting a redemption (unless it is a full redemption). You can redeem trough the following methods; Initiate a redemption request via the Hobbiton Unit Trust USSD Mobile App. Log into the portal and submit a redemption request. Downlaod a redemption form the website,fill it in and send it via email to Hobbiton Investment Management.

Switching Between Funds

This facility enables you to convert units of one fund to units of another fund managed by us. Switching of units from one fund to another is considered as a withdrawal of investment from one fund and an investment in another fund.

There is no limit as to the frequency of switches.For any switches requested during the year,no fees will be charged. We reserve the right to effect or reject the switching request if any of the following conditions are not fulfilled:


1. Completion of the Transaction form.
2. The account does not maintain a minimum balance of ZMW 1000 Units in the Fund (For partial Switching) following the switch.
The amount switched must meet the minimum application amount of the new fund.

How do Unit Trusts Make Money

A Unit Trust makes money in two ways,namely; Firstly, through an increase in value of the units held in the fund.As the value of the investments and securities held in the fund increases,so does the value of the units held by the individual Unit Holders.This is know as unit appreciation. Secondly,the profits earned by the fund are passed on to the investor through periodic distributions made from income received through interest accrused from bonds,treasury bills and other money market instruments as well dividends from shares held by the fund.

Transfer of Units You can transfer all or part of your units to another person within the same fund by completing the transfer form and signed by both parties (Transferor & Transferee). A fee of ZMW10/- will be charged for each transfer. We reserve the right to accept or refuse to register a transfer. Minimum Holding You are advised to always maintain an account balance of ZMW 50 Units for individual unit holders and ZMW5,000 units for non-individual unit holders. We reserve the right to levy an account maintenance fee of ZMW10/ - in the event the units of a Fund held are below a minimum holding

Risk Factors Affecting the Funds

General Risks All investments carry risks. As an investor, you must be prepared to accept a certain degree of risk when investing in unit trusts. The following are some of the general risks associated with unit trust investments: Market risk due to price fluctuations of securities invested in by the funds, the value of a unit trust investment may go up as well as down. The movement in securities prices is influenced by a number of factors, which include changes in economic, political and social environments.

Currency Risk This risk applies to investments in foreign securities where exchange rates between the local currency and foreign currencies fluctuate and affect the return and volatility of any foreign currency denominated investment. Country Risk The stock prices may be affected by the political and economic conditions of the country in which the stocks are listed.

Unexpected events may stop the fund manager from realizing the full value of assets in those countries. Return not Guranteed As income distribution is not guaranteed, there is a risk that there may not be any distribution of income for the particular fund. Credit Risk This applies to debt-type investments such as bonds, debentures, fixed income instruments and sale of equity investment.

The institution invested in may not be able to make the required interest/profit payment of principal. Similarly, firms whose securities are traded may default on their obligation to pay. Inflation Risk The purchasing power of income received from unit trust investments may not keep pace with inflation. Interest Rate Risk This applies to fixed income securities, where the value of the investment may go up as well as down resulting from interest rate movement.

Manager’s Risk Poor management of fund by the Manager may cause the fund to decrease in value, which in turn may cause the capital invested by a unit holder to be at risk. Risk of non compliance The risks that the Manager and others associated with the fund fail to comply with the deed of the fund, the law that governs the fund, or the internal policies, procedures and controls. The noncompliance may expose the fund to higher risk that may affect your investments.

Operators and Principals
Management Company: Hobbiton Investment Management Limited Plot 13,Nchenja Road Northmead,Lusaka.
Po Box 36885,Lusaka,Zambia
Directors : Mwangala Mwiya –Executive Director Isaac Kandila – Chairman Trustee : AMG Global Trust Company Limited No.6 Lagos Road,Rhodes Park Po Box 37893,Lusaka,Zambia
Custodian : Stanbic Bank Zambia Limited Stanbic House Plot 2375 Addis Ababa Drive,Lusaka.
Auditor : MKM Consult Limited 29 Lusenfwa Road,Kalundu,Lusaka.