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INVESTIGATING THE VIABILITY OF UNIT TRUST BUSINESS IN ZIMBABWE

Kunofiwa Tsaurai

DOI: 10.22495/cocv10i1c7art6

Abstract

This paper uses a case study methodology to investigate the viability of unit trust business in Zimbabwe during the period from 2000 to 2005. The research revealed that unit trust companies at least managed to break even during the period under study except in 2004. However, factors which worked against unit trust business viability in Zimbabwe during the period under study include among others the restrictive regulatory framework, harsh operating economic environment, trustee inefficiency, low volume of funds under management, poor asset and liability management strategy, high levels of withdrawals and low confidence levels in unit trust companies. It can be concluded that unit trust business has good potential in Zimbabwe. The fact that unit trust funds’ returns have been consistently outperforming both inflation and stock market growth shows a great potential for unit trust business in Zimbabwe. The author therefore recommends that policies, which are geared towards boosting unit trusts’ funds under management, should be intensified, in order to promote long-term viability of unit trust business in Zimbabwe.

Keywords: Zimbabwe, Unit Trusts, Viability, Funds Under Management, Profitability

How to cite this paper: Tsaurai, K. (2012). Investigating the viability of unit trust business in Zimbabwe. Corporate Ownership & Control, 10(1-7), 705-710. http://doi.org/10.22495/cocv10i1c7art6

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