Unit Trusts and Money Market Funds in Uganda (2026): How They Work and What Protects Your Money

The gap between a savings account and a treasury bill

A savings account is easy to open and easy to reach, and pays very little. A treasury bill pays considerably more, but you buy it at auction, you need a CSD account, and your money is committed for the term.

A unit trust sits between the two, and most Ugandans have never had it explained to them. You put money into a professionally managed pool, you can generally take it out within days rather than at the end of a fixed term, and the pool holds the same government securities you would struggle to buy in small amounts yourself.

But a unit trust is an investment, not a deposit, and what protects you is not a guarantee — it is a legal structure. Understanding that structure is the difference between investing sensibly and handing money to a firm because its brochure looked professional.

What a unit trust actually is

The Capital Markets Authority describes a collective investment scheme as an arrangement pooling the resources of many small savers, invested across assets such as shares, bonds, property and treasury bills to reduce risk through diversification.

In Uganda the scheme you will be offered is a unit trust, where your investment is measured by the number of units you hold. The pool is held on trust: you own units in it, you do not own the underlying securities, and you are not lending money to the manager. It is governed by the Collective Investment Schemes Act, 2003 and the Collective Investment Schemes (Unit Trusts) Regulations, 2003 — a 145-regulation instrument whose stated purpose is "to assure a high level of investor protection for the benefit of those who invest in such trusts."

CMA sets out three fund categories: the Money Fund, holding short-term instruments such as treasury bills, which CMA calls "better suited for people who wish to save money over a short period of time"; the High Yield Fund, holding medium-term securities; and the Balanced Investment Fund, a longer-term mix of bonds and shares. Managers sell these under their own product names, and the register also shows bond, equity, fixed-income, dollar and umbrella funds — so read the scheme particulars for what a fund actually holds rather than trusting its name.

The protection that matters: the trustee holds the money

Under the 2003 Regulations the manager and the trustee are separate parties, and the trustee — not the fund manager — must take the scheme's capital property into its custody or control and hold it in trust for unit holders (regulation 93). The trustee also collects income due to the scheme and holds that on trust.

The trustee's job is to police the manager. Regulation 92 requires it to take reasonable care that the scheme is managed within the manager's powers, and to satisfy itself on a continuing basis that the manager's records and pricing procedures keep prices within the prescribed limits. If it is not satisfied, it must tell the Authority.

That separation is why a licensed unit trust differs fundamentally from an unlicensed "investment club" or a scheme promising fixed monthly returns: the firm making the investment decisions is not the firm holding your money.

CMA licenses only two trustees in Uganda — Standard Chartered Bank Uganda and KCB Bank Uganda. If a firm selling you a fund cannot say which licensed trustee holds the assets, that is not a detail to chase up later. It is your answer.

What a money market fund may hold

Money market funds are where most people start, and the Regulations constrain them tightly. The property must consist of money market fund assets — broadly cash and near cash, bills of exchange accepted by an eligible institution repayable within twelve months, and certain deposits repayable within six months (regulation 58). Then:

At least 50% by value must be redeemable or repayable within two weeks, or transferable without a third party's consent (regulation 59);
Up to 80% may be transferable securities, not including equities;
No more than 5% may come from any one issuer — a cap that does not apply to Government and other public securities, where up to 30% may sit in the same issue, and anything above 35% in government securities must span at least three different issues (regulation 60);
No more than 10% may be on deposit with any one institution, and never with the manager or its associates.

Borrowing by any scheme is capped at 10% of scheme property on any business day (regulation 65). None of this makes a money market fund risk-free. It means the risks are bounded, disclosed and supervised — a more honest claim than "safe".

Getting your money out

The manager must be willing to redeem units at all times during a dealing day, at a price set under the Regulations, when a holder asks in writing (regulation 30). One carve-out matters: if the scheme particulars state a minimum redemption size, a partial redemption below it can be refused — though redeeming your whole holding is not caught by that.

Regulation 31 sets the payment deadline. For most funds, proceeds are due by close of business on the fourth business day; for a money market fund — or a securities fund more than half invested in Government and other public securities — by close of business on the business day next after. Both run from the later of the valuation point following your request and the point at which you supplied all properly executed instructions. The manager may deduct the cost of remitting money abroad, any redemption charge and any levy or tax imposed by law, and may hold payment while completing identification checks required by law.

Dealing can be suspended, but not indefinitely: under regulation 141 the manager may suspend issue and redemption only with the trustee's prior agreement or at its requirement, only for good and sufficient reason having regard to holders' interests, and for no more than 28 days — with CMA told the reasons and notice published in a national English-language newspaper. A fund that has simply stopped paying people, with no notice and no trustee involvement, is not exercising regulation 141.

What you pay, and the limit on raising it

Knowing where the ceiling sits is more durable than memorising a percentage that will change.

On the way in, the only permitted charge is a preliminary charge — a fixed amount or a percentage of the issue price, plus any tax or levy imposed by law. The manager may charge nothing else on issue and may not exceed the current charge stated in the scheme particulars (regulation 29).
While invested, the only payment the manager may take from scheme property for its services is a periodic charge, and only where the trust deed authorises it (regulation 104).
On the way out, an exit charge may be deducted from proceeds where the scheme permits.
Increases are not the manager's to wave through. Where a combination of entry and exit charges would exceed the trust deed's stated maximum for the preliminary charge alone, it cannot take effect unless the trust deed is modified or holders approve it by extraordinary resolution (regulation 34).

So the documents that cap your costs are the trust deed and the scheme particulars. Ask for both.

What you are owed before you invest

Scheme particulars, for whose accuracy the manager is responsible — they must contain no untrue or misleading statement and omit nothing the Regulations require (regulation 12).
The latest annual and half-yearly reports. A manager may not sell you units until it has made the most recent annual and half-yearly reports available for inspection, or sent them on request, in English (regulation 119). An annual report must carry audited accounts, a comparative table, a statement of dealing commissions, and a separate report from the trustee to holders.
Published prices. A manager holding itself out as willing to deal must publish the price, the current preliminary charge and any exit charge on the business day following each valuation, in at least one English-language newspaper of nationwide circulation, rounded to the nearest whole shilling (regulation 37), with a statement that its latest report and scheme particulars are available on request (regulation 120).

Reading the trustee's report is a habit worth forming. It is the one document in the pack not written by the firm managing your money.

How to check a manager is licensed

Do this before transferring anything, on CMA's own register rather than a link the salesperson sends you: cmauganda.co.ug/cma-licensed-firms.

As listed there on 31 August 2026, the licensed unit trust and collective investment scheme managers were Britam Asset Managers Company (Uganda), Cornerstone Asset Managers, Genafrica Asset Managers Uganda, ICEA Lion Asset Management Company (U), Kura Asset Managers, Kweli Capital Uganda, Mayfair Asset Managers, Old Mutual Investment Group, Sanlam Allianz Investments, SBG Securities Uganda and Xeno Investment Management. The two licensed trustees were Standard Chartered Bank Uganda and KCB Bank Uganda.

Registers change. Check the live page, confirm the specific scheme you are being sold appears against that manager, and confirm which trustee holds it. If something goes wrong with a licensed firm, CMA runs a complaints process — its complaints form, or a written complaint to the Director, Market Supervision — and states it will respond setting out the planned course of action and the officer assigned.

Tax

URA lists among exempt income "income of a collective investment scheme to the extent of which the income is distributed to participants in the collective scheme."

Read that precisely, because it is narrower than the way it is usually repeated. The exemption applies to the scheme's income and is conditional on that income being distributed. It is not a blanket statement that every unitholder's return is tax-free in every circumstance. Proposals in 2022 and 2023 to impose withholding tax on unit trust returns were not enacted, and Uganda's 2026 income tax amendments did not change the exemption — but tax law here is amended every year, so confirm your own position with URA or a tax adviser, particularly if you invest through a company.

A unit trust is not a bank deposit

The Deposit Protection Fund protects deposits at Bank of Uganda-licensed deposit-taking institutions up to UGX 10 million per depositor — see what DPF deposit protection covers.

A unit trust is not a deposit, and DPF is not what stands behind it. What stands behind it is the structure above: a CMA licence, a separate licensed trustee holding the assets, statutory investment limits, audited reporting and published prices. That guards against mismanagement and misappropriation. It does not protect you from the investments falling in value. A fund can be well run and still return less than you hoped.

So a unit trust belongs alongside, not instead of, the rest of your base: accessible savings for emergencies (choosing a savings account), direct government securities if you can commit for the term (treasury bills and bonds), and long-term retirement provision (NSSF, explained). To test what regular contributions do over time, use the compound interest calculator.

Frequently asked questions

Is a money market fund safer than a savings account? It is a different arrangement, not simply a safer one. A savings account is a deposit protected by DPF up to UGX 10 million; a money market fund is an investment protected by licensing, trustee custody and statutory investment limits rather than a guarantee. Its holdings are tightly constrained, but its value is not guaranteed.

How quickly can I get my money back? For a money market fund, by close of business on the business day next after the relevant valuation point. For most other funds, the fourth business day.

Can a fund refuse to let me withdraw? Only within limits. A partial redemption below a minimum stated in the scheme particulars can be refused, and dealing can be suspended under regulation 141 — but only with trustee agreement, for good and sufficient reason, for no more than 28 days, with CMA notified.

Who holds my money, and what if the manager collapses? The trustee, not the manager (regulation 93). Assets are held in trust for holders rather than on the manager's balance sheet, and the Regulations provide for replacing a manager — though that still does not protect the value of the underlying investments.

Do I pay tax on unit trust returns? URA exempts a collective investment scheme's income to the extent it is distributed to participants. That sits at scheme level and is conditional on distribution, so confirm your own position with URA rather than assuming your receipt is automatically untaxed.

Sources

The Collective Investment Schemes (Unit Trusts) Regulations, 2003 (SI 2003 No. 100), made under sections 30 and 31 of the Collective Investment Schemes Act, 2003 — regulations 12, 29, 30, 31, 34, 37, 58, 59, 60, 65, 92, 93, 104, 117, 119, 120 and 141.
Capital Markets Authority of Uganda — licensed and approved firms register (listing stated as at 26 June 2026; read 31 August 2026); investor education FAQ; complaints handling page.
Uganda Revenue Authority — exempt income listing.
Deposit Protection Fund of Uganda — UGX 10 million protected limit.

Last reviewed: 31 August 2026. General information, not financial advice. Charges, minimum investments and fund holdings are set by each manager in its trust deed and scheme particulars — request both, and confirm the manager, scheme and trustee on CMA's live register before investing.