Unit Trusts in Zimbabwe (2026): How Collective Investment Schemes Work and What Actually Protects You

The gap between a savings account and buying shares

Most Zimbabwean savers face a hard jump. On one side there is a bank account, which is safe in a narrow legal sense and loses ground steadily. On the other there is buying shares directly on the ZSE or VFEX, which requires you to pick individual companies, open a broker account, and hold your nerve.

Unit trusts exist to fill that gap. They are the most common way, almost everywhere in the world, for an ordinary household to own a diversified portfolio without becoming a stock picker.

They are also widely misunderstood in Zimbabwe, and the most damaging misunderstanding is about protection. There is an Investor Protection Fund. It does not do what most people assume it does. This guide sets out how the structure works, who is watching it, and precisely where the protection stops.

What a unit trust actually is

The Securities and Exchange Commission of Zimbabwe defines a unit trust as "a professionally managed pool of funds from a group of investors that share the same investment objectives."

Mechanically: many investors put money in; the pooled money buys a portfolio of assets; your holding is expressed as units, each representing a slice of the whole. When the underlying assets rise, the value of a unit rises. You are not buying a company's shares — you are buying a fraction of a professionally run portfolio.

The advantages over doing it yourself are structural, not promotional:

• Diversification at small amounts. A modest sum buys exposure to many holdings rather than one or two.
• Professional management, with research capacity you do not have.
• Liquidity, in that units can normally be redeemed with the manager rather than requiring you to find a buyer.
• Administration, which the manager handles.

The disadvantages are equally structural. You pay fees whether or not the fund performs, you do not choose the individual holdings, and — the point people forget — a unit trust is not capital-guaranteed. Units fall as well as rise. A professionally managed loss is still a loss.

The structure, and why the manager and trustee are separate

This is the part of the law worth understanding, because it is the real protection — more so than any compensation fund.

Collective investment schemes are governed by the Collective Investment Schemes Act . A unit trust scheme is constituted by a trust deed entered into between the management company and the trustee. That deed sets out the responsibilities of each, the investment policy, and the restrictions within which the management company may operate.

Two features of the Act matter enormously to you as an investor:

1. Only a company registered and resident in Zimbabwe may be licensed as a Manager or a Trustee.
2. The Manager and the Trustee of an internal scheme must be separate companies, under separate control.

That second requirement is the structural safeguard. The manager makes investment decisions. The trustee holds the assets and polices the manager against the trust deed. Because they must be different companies not under common control, a manager cannot simply help itself to the fund's assets — the assets are not in the manager's hands.

This is why the single most useful question you can ask a salesperson is not "what returns do you get?" but "who is the trustee?" A legitimate scheme answers immediately. An arrangement that cannot name a separate trustee is not a unit trust, whatever it is being called.

The Act provides for registration in three categories — internal schemes, external schemes and professional schemes. Internal schemes are the unit trust schemes constituted by a trust deed executed in Zimbabwe and operated wholly or mainly in Zimbabwe, and they are what an ordinary retail investor will normally encounter.

Who regulates it, and what a licence requires

Investment management companies (asset managers) and collective investment schemes are regulated by the Securities and Exchange Commission of Zimbabwe, the statutory regulator of the securities and capital markets.

SECZ's published licensing requirements for an investment management company give a sense of the bar:

• Capital adequacy: net assets of US$500,000, supported by an auditor's certificate confirming current capital, plus demonstrated capacity to fund the first year of operations.
• Fit and proper checks on personnel, including detailed CVs, police clearance certificates, and academic and professional certificates.
• Professional indemnity insurance cover.
• Audited annual accounts for the preceding two years, and unaudited accounts for the recent period.
• Application fees of $10,000 for an initial application and $3,000 for renewal.

None of this guarantees performance. What it does is filter out the undercapitalised and the unvetted, and give the regulator something to supervise against.

The Investor Protection Fund: read this before you assume

SECZ has facilitated the establishment of an Investor Protection Fund, described as providing "an additional layer of protection for investors" and offering "reimbursement for losses suffered as a direct result of a licensed player becoming insolvent."

Read that scope precisely, because the wording is doing specific work.

It covers: losses arising directly from the insolvency of a licensed player.

It does not cover: your fund going down. If markets fall, if the manager's stock picks are poor, if the ZiG value of your holding is eroded — those are investment losses, and they are yours. No protection fund anywhere compensates for a bad year, and it would be a strange scheme if it did.

And it covers licensed players. If you handed money to an unlicensed operator, there is no licensed player to become insolvent, and nothing to claim against.

This is the same structural point we make about banks in is my money protected in Zimbabwe? and about insurers in the funeral assurance market. Zimbabwe has three separate protection arrangements — the Deposit Protection Corporation for bank deposits, IPEC's supervision of insurers, and SECZ's Investor Protection Fund for capital markets — and every one of them is a defined, limited promise about a specific failure mode. None of them is a promise that you will not lose money.

Anyone selling you an investment on the basis that "it is regulated, so your capital is safe" is either confused or lying. Test them against the checks in how to avoid investment scams.

The currency question, which in Zimbabwe is the whole question

Before comparing funds, establish what currency a fund is denominated in and what it holds. This matters more in Zimbabwe than almost anywhere.

The ZSE is ZiG-denominated. The Victoria Falls Stock Exchange is US dollar-denominated, and in the first half of 2026 VFEX overtook the ZSE by market capitalisation — the USD market is now the larger of the two. A fund invested primarily on the ZSE and a fund invested primarily on VFEX are exposed to fundamentally different currency risks, whatever their headline returns look like.

A nominal return in ZiG is not comparable to a nominal return in US dollars, and comparing them as if they were is the most common analytical error made by Zimbabwean investors. Our guide to ZiG versus USD covers how to think about that, and how to invest on the ZSE and VFEX covers direct share investing if that is where you are heading.

Ask the manager directly: what currency are units priced in, what currency are the underlying assets in, and in what currency will I be paid on redemption? Get all three answers.

There is also an opportunity cost to weigh. The Reserve Bank of Zimbabwe's bank policy rate stood at 35% at the February 2026 Monetary Policy Statement, unchanged since September 2024, with ZiG inflation reported at 3.8% year on year. That environment shapes what money market and fixed income funds can plausibly deliver, and it means a fund's return should be assessed against what you could get elsewhere, not in isolation.

Tax, honestly

Three points, and one refusal.

Dividend withholding tax applies at 10% on listed shares and 15% on unlisted shares. Where a fund receives dividends, that tax affects what reaches you.

IMTT applies to the electronic payments you make funding an investment — 2% on USD transactions and 1.5% on ZiG following the 2026 reform, with a flat $10,150 at or above a transaction value of $500,000. On a lump sum this is a real cost; run your actual figure through our IMTT calculator before deciding between one large contribution and several smaller ones.

On capital gains, we publish no rate. Three unreconciled conflicts between ZIMRA-sourced figures were found when this site researched Zimbabwean capital gains tax, and rather than pick one and hope, we decline to publish any. If your decision turns on the CGT treatment of disposing of units, get that specific answer from ZIMRA or a registered tax practitioner before you commit. We would rather send you away than give you a number we cannot stand behind.

Costs: what to ask, since we will not print a number

Fund charges in Zimbabwe vary by manager, fund type and investment size, and any figure published here would be wrong for most readers. So ask for these in writing, before you sign:

• The initial or entry charge, if any, and whether it is negotiable at your amount.
• The annual management fee, expressed as a percentage of your holding.
• Any performance fee, and critically, what benchmark it is measured against — a performance fee against a weak benchmark is just a higher management fee.
• Total costs, expressed as a single annual figure including administration and trustee costs.
• Exit charges and notice periods, and how quickly a redemption actually pays out in practice.
• The minimum initial investment and minimum top-up.

Fees compound against you exactly as returns compound for you. A one percentage point difference in annual charges is not trivial over a decade — but be equally sceptical of anyone quoting you a dramatic soundbite about fees eating a third of your pot. Work it out for your own amount and horizon rather than accepting either the sales pitch or the scare story.

Before you hand over money

• Confirm the firm is licensed by SECZ. SECZ publishes lists of licensed players, and its own guidance is to "deal with only licensed capital market players."
• Ask who the trustee is, and confirm it is a separate company under separate control from the manager.
• Read the trust deed's investment policy, or at least the fund fact sheet setting out what the fund may and may not hold.
• Establish the currency of units, underlying assets and redemption.
• Get all charges in writing.
• Never pay into a personal account. Payment should go to the scheme, not to an individual — the same discipline set out in is this lender licensed?.
• Treat guaranteed high returns as disqualifying. A regulated unit trust cannot guarantee a return, so anyone offering one is not selling you a regulated unit trust.

Where this fits in a Zimbabwean financial plan

Investing sits above, not instead of, the foundations. A unit trust is a poor place to keep money you may need next month, because you would be forced to redeem at whatever the units are worth on that day.

The sensible order is: a working buffer you can reach immediately, then an emergency fund sized to your circumstances, then longer-term investing on top. Our guide to saving money in Zimbabwe covers the layers below this one, and NSSA benefits explained covers the statutory retirement layer that sits alongside anything you do privately.

If you are earning in US dollars and holding a long horizon, a fund is one of the few realistic routes to owning productive assets rather than watching cash erode. Just go in knowing what is protected, what is not, and what you are paying.

Frequently asked questions

What is a unit trust? SECZ defines it as "a professionally managed pool of funds from a group of investors that share the same investment objectives." Your holding is expressed in units representing a share of the pooled portfolio.

Who regulates unit trusts in Zimbabwe? The Securities and Exchange Commission of Zimbabwe, under the Collective Investment Schemes Act . SECZ licenses both the investment management companies and the schemes.

Does the Investor Protection Fund cover me if my fund loses value? No. It provides reimbursement for losses suffered as a direct result of a licensed player becoming insolvent. Market losses, poor performance and currency erosion are not covered, and neither is money handed to an unlicensed operator.

Why must the manager and trustee be separate? Because the trustee holds the scheme's assets and enforces the trust deed against the manager. The Act requires them to be separate companies under separate control, which is what stops a manager from having direct access to your money. If a scheme cannot name a separate trustee, treat that as a serious warning.

What capital must an asset manager hold? SECZ's published capital adequacy requirement for investment management companies is net assets of US$500,000, evidenced by an auditor's certificate, alongside fit and proper checks and professional indemnity insurance.

Should I choose a ZiG fund or a USD fund? That depends on the currency you earn, spend and plan in — but do not compare their nominal returns directly, because they are not comparable. Establish the currency of the units, of the underlying assets, and of redemption before comparing anything.

How do I complain about a fund manager? SECZ's guidance is to try to resolve the matter with the intermediary first, and if nothing is resolved, to lodge the complaint directly with SECZ.

Last reviewed: August 2026. General information, not financial, investment or tax advice, and not a recommendation of any fund or manager. Investments can fall in value and past performance does not predict future returns. Confirm licensing with SECZ and tax treatment with ZIMRA or a registered tax practitioner before investing.