Tanzania’s CMSA approves five new investment schemes to spur wealth creation

Dar es Salaam. The Capital Markets and Securities Authority (CMSA) has approved the prospectuses and operational agreements of five collective investment schemes with iTrust Finance Limited.

The announcement was made yesterday by CMSA CEO, Mr Nicodemus Mkama, who emphasised that the primary objective of these funds is to enable small, medium, and large investors to pool their resources and capitalise on opportunities within the financial sector, particularly in the capital markets.

“By approving these collective investment schemes, we are encouraging investments and boosting capital flow, which is vital for economic growth,” Mr Mkama said.

He further noted that the approval allows a broader segment of the population to access financial products, diversify their investments, and stimulate economic activity.

According to Mr Mkama, fostering a more active and transparent financial market will lead to increased investor confidence, improved economic stability, and potentially higher returns on investments.

He noted that such initiatives often result in job creation, infrastructure development, and better resource allocation across various sectors, further contributing to overall economic growth.

The chief executive of iTrust Collective Investment Fund, Prof Mohamed Warsame, elaborated on the launch of the iTrust Collective Investment Fund, a pooled investment scheme designed to allow multiple investors to combine their capital and invest in a diversified portfolio that includes equities, bonds, bank deposits, and other securities.

“This launch marks a significant step towards providing both individual and institutional investors in Tanzania with access to a professional investment management system aimed at growing their wealth while reducing risk,” Prof Wasame explained.

He outlined that the iTrust Collective Investment Fund operates in five key areas, including fundraising, where capital is sourced from individuals, groups, institutions, and organisations to create a sizable fund for investment.

A professional fund manager will oversee the fund’s portfolio, making informed decisions to ensure a balanced mix of investments.

“The fund is diversified across various asset classes, which helps to minimise risk and increase the likelihood of generating stable returns,” he added.

Prof Warsame further explained that the fund will generate earnings from its holdings, including interest on bonds and capital gains from appreciating equities.

These returns will be distributed to investors in proportion to their share of the fund, enhancing the value of their investments.

Key benefits for investors include diversification, which minimises risk and maximises potential returns by spreading investments across various asset types.

By diversifying the portfolio, the fund aims to mitigate the impact of poor-performing assets on overall investment performance.