Collective Investment Schemes; the future of Investing in Ghana
Collective Investment Schemes (CIS) are pools of investor funds that are managed on their behalf by a professional fund manager. These schemes have clearly spelt out investment objectives which determine where funds are invested. These funds are invested in different classes of investments such as bonds, stocks, commercial paper, short term government securities among others. Collective investment schemes in Ghana take the form of either a Mutual Fund or a Unit Trust.
The investor receives units or shares that represent his/her pro-rata share of the pool of funds in return for putting money into these funds. The fund manager is also compensated for administering the fund and managing the portfolio by charging a fee based on the value of the funds under management.
The prices of these shares will fluctuate daily because the underlying value of the assets will rise and fall and since the total value of the fund is divided by the number of shares issued, your individual stake will rise and fall to reflect this.
Benefits of Collective Investment Schemes
These funds are regulated by the Securities and Exchange Commission (SEC) of Ghana.