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3 Investments You Can Make With 5000 Kenyan Shillings

One of the reasons why most people do not invest is because we feel like after we've budgeted for all our mandatory bills and expenses, and paid for everything we need to pay for during the month, we simply don't have enough money left to save or even to invest. But what if I told you that you could start your investment journey with as little as 5000 Kenyan shillings. In today's article, I'm taking you through three investments that you can do with as little as 5000 Kenyan shillings.

The first investment option that you have with 5000 Kenyan shillings is obviously the money market funds. money market funds are peculiar or unique in the sense that you're able to kill two birds with one stone, you're able to save because they give you capital preservation, which means there's little to no risk of losing your money, and you're also able to invest because you get an interest on your money. Most money market funds in Kenya give you an interest rate ranging between maybe 6% to 9%. Before COVID, the rates were definitely better because it was going all the way to maybe 12% on the maximum. But the interest rates that most money market funds give you are actually able to compensate you for inflation.

The second investment that you can do with 5000 Kenyan shillings is what we call a bond fund or a Fixed Income Fund. Now a Fixed Income Fund is a fund found under the umbrella of a unit trust. And where you get money market funds is also where you get the bond fund. Now, the bond fund ideally invests your money in corporate bonds and treasury bonds. So your fund manager or the unit trust that you've invested in, particularly the bond fund will take our money, they will pull money from different investors, and then select bonds that are performing well and invest in those bonds. And when the bonds generate a return, then they pay their clients or return. So you're not the one to go to the bond market and source for these bond investments. The fund manager or the unit trust in question are the people who go to do the investment on your behalf.

Option number three of where you can invest your money if you only have 5000 Kenyan shillings, is what we call the Balanced Fund. Now, the Balanced fund is another fund under unit trusts. The Balanced Fund, just by the name,  provides a balanced portfolio. So you will give your money to the fund manager or the unit trust, and they are going to actually invest your money in treasury bills and bonds, they're going to have a bit of your money going into corporate debt, and then they're going to have a bit of your money going into equities. So ideally, what that does is that it exposes your money not just to one asset class, but to add diversified assets or to a built-in portfolio.

In most companies, sometimes you'll find that they have 60%, or maybe 50% in Treasury securities. So that is built-in bonds, and then you have maybe another 30% Going into private corporate debt. And then you have another 20% Going into the stock market or equities. So you see, the risk that your money is being exposed to, in that particular investment option is moderate, because you have a mix of low-risk investments, and high-risk investment, in this case, the Balance Fund is a very good investment option for someone who's not sure on where to invest his or her money.

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