Ziada fund oversubscribed, investor appetite rises

DAR ES SALAAM: THE Ziada Fund closed 38 per cent above target, underscoring strong investor demand for unit trusts and signalling growing confidence in evolving collective investment market.

Africa Pension Fund (APeF), the fund manager, said the offer drew applications worth 13.86bn/-, surpassing the planned 10bn/- target after attracting 1,578 investors during the subscription window that ran from January to mid this month.

APeF Chief Executive Officer Mfaume Kimario said yesterday the oversubscription points to increasing confidence in collective investment schemes, particularly those offering insurance-linked features that blend savings and protection.

“The result reflects a gradual shift by Tanzanian investors away from traditional bank deposits toward diversified, professionally managed portfolios,” Mr Kimario said.

The Capital Markets and Securities Authority approved the offer, with National Bank of Commerce acting as trustee and custodian. APeF is licensed as both fund manager and investment adviser.

Despite the excess demand, all valid applicants will receive full allocation following regulatory approval, allowing the fund to absorb the entire 13.86bn/- raised.

The units were priced at 100/- each. Unit trusts, once a niche offering, are increasingly being positioned as entry points for first-time investors seeking exposure to equities, bonds and other assets without direct market participation.

Industry players note that insurance-linked funds are gaining traction because they address two needs at once: long-term savings and risk cover.

This dual appeal has become particularly relevant in a market where pension coverage remains limited and informal sector participation is high.

ALSO READ: How Tanzanian T-bonds are reshaping investor appetite

The fund’s performance will now be closely watched as a bellwether for future issuances in Tanzania’s collective investment space, where competition among asset managers is expected to intensify. For individual investors, the attraction went beyond returns alone.

Investors with 250,000/- and above qualify for life insurance cover equal to 50 per cent of their investment value, meaning beneficiaries may receive up to 150 per cent of the amount invested in the event of an unfortunate occurrence.

“That distinctive structure appears to have given the Fund a particular advantage,”

Mr Kimario said adding “especially in a market where investors are increasingly looking for innovation and more relevant product design, an area appears we have responded thoughtfully”.

The Ziada Fund is an open-ended, insurance-linked unit trust that blends money market investments with life insurance protection. It allows investors to start with a minimum of 50,000/-, with additional top-ups from 10,000/-.

The fund offers liquidity, enabling withdrawals within three business days, while maintaining exposure to diversified money market and debt instruments aimed at stable returns.