Wealthy Kenyan investors have stepped up investments outside the country with their target being foreign-backed mutual funds.
Standard Chartered Bank head of wealth management, Kenya and East Africa Paul Njoki said the wealthy Kenyans are trying to hedge against risks in the local economy by investing abroad.
Mr Njoki singled out the rising popularity of mutual funds which he noted have gain popularity as an option in diversifying risks abroad for Kenya’s rich especially the ones that invest in the foreign market.
A mutual fund is an investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets.
“While these funds are not risk-free, they offer another avenue for investment and diversification of assets,” said Mr Njoki in interview.
International mutual funds or overseas funds are portfolio of equities, bonds, and money market securities traded in foreign market.
Mr Njoki noted that the funds have gained popularity because of the diversification they offer.
“They offer many benefits such as taking advantage of emerging markets, commodities boom, or business cycle of different markets,” he said.
SOURCE: BUSINESS DAILY