Uganda’s Collective Investment Schemes have surpassed $1 billion in Assets Under Management, showing a 9.6% quarterly increase and 63.2% annual growth. The growth is attributed to a strong regulatory framework and increased investor participation, particularly from NSSF members. With seven active manager firms, the number of funded CIS accounts has also risen significantly. Despite being behind Kenya and Tanzania in AUM, Uganda boasts a superior AUM-to-GDP ratio, indicating growth in capital markets.
Uganda’s Collective Investment Schemes (CIS) have achieved a significant milestone, exceeding $1 billion (UGX 3.85 trillion) in Assets Under Management (AUM) by December 2024. This reflects a 9.6% quarterly increase from UGX 3.51 trillion in September 2024, and a remarkable yearly growth of 63.2% from UGX 2.36 trillion at the end of 2023. The impressive growth of CIS is largely attributed to a stable regulatory framework, heightened investor confidence, and increased participation from members of the National Social Security Fund (NSSF).
The number of active CIS managers has expanded to seven, which include notable firms such as Britam Asset Managers Uganda and Old Mutual Investment. Investor engagement has intensified, with funded CIS accounts rising from 101,637 in September to 113,445 by December, marking an 11.6% quarterly and a 60.29% annual increase from 70,771 accounts last December.
Josephine Okui Ossiya, the CEO of the Capital Markets Authority (CMA), emphasized the ongoing positive trend, stating that more Ugandans are recognizing the benefits of pooled savings vehicles. She noted that the robust regulatory environment fosters confidence and safeguards investors within the CIS. Meanwhile, despite reaching this milestone, Uganda’s AUM is still less than Kenya’s $2.44 billion and Tanzania’s $1.05 billion.
Nevertheless, Uganda’s AUM-to-GDP ratio improved to 2.3%, surpassing Kenya’s ratio of 2.2%, indicating a growing role for capital markets in the nation’s savings strategies. The CMA encourages Ugandans to engage only with regulated products and licensed entities to ensure secure investment growth.
Collective Investment Schemes in Uganda have gained popularity as a means for investors to pool resources, thus enhancing access to diverse markets and investment opportunities. As the financial landscape evolves, the role of regulatory bodies like the Capital Markets Authority becomes crucial in instilling confidence among investors, ensuring that financial products are both safe and beneficial. The shift towards CIS reflects broader trends in financial participation across East Africa.
The recent growth of Uganda’s Collective Investment Schemes, surpassing the $1 billion mark, is a testament to the increasing investor confidence and the effectiveness of regulatory frameworks. While Uganda still trails behind some regional competitors, its solid AUM-to-GDP ratio and rising investor participation signal a promising future for capital markets in mobilizing national savings. The need for continued regulation and awareness remains paramount to safeguard investor interests.
Original Source: softpower.ug
