Stakeholders are warning that growing interest in collective investment schemes is exposing ordinary Malawians, especially first-time investors, to potential risks that demand stronger protection and transparency in the financial sector.
The Reserve Bank of Malawi (RBM) has cautioned fund managers to always prioritize the interests of investors, noting that many people entering the market are small and first-time participants who rely heavily on accurate guidance.
RBM Director for Capital Markets and Microfinance Khumbo Mtalika said misinformation about potential returns can easily erode investor confidence and weaken the integrity of financial markets.
She also warned fund managers to remain alert to risks linked to liquidity, valuation, and custody of assets, stressing that early action is key to preventing losses that could undermine public trust in collective investment schemes.
Mtalika made the remarks on Wednesday evening in Blantyre during the launch of Old Mutual Unit Trust’s Equity Fund, a new investment product introduced to expand access to equity investments for members of the public.
She described the new fund as an important addition to the market, saying it strengthens collective investment opportunities while supporting national development.
“If you want to go far, you have to go as a group,” Mtalika said, explaining that the fund allows many individuals to pool their money into one large investment that can finance companies and government infrastructure projects, opportunities that would be difficult for individual investors to access on their own.
The Equity Fund is the company’s third investment product since entering the market in 2009.
Old Mutual Unit Trust Chief Executive Alfred Majamanda said the new fund is designed to allow members of the public to invest in shares indirectly through a professionally managed platform.
He said the product makes it easier for ordinary Malawians to participate in the stock market without directly buying shares, while benefiting from expert management in selecting investment opportunities.
Majamanda added that investors only need a minimum of K500,000 to participate, with onboarding made simple through digital platforms and self-service registration options.
He further dismissed concerns over recent fluctuations on the Malawi Stock Exchange, saying market ups and downs are normal and should not discourage long-term investment.
“Share prices move up and down just like any other market. What matters most is long-term investment, where real returns are realized over time,” he said.
Majamanda also emphasized that investors in the Equity Fund benefit from professional expertise, as fund managers determine when and where to invest to maximise returns and manage risks effectively.
