By Erastus Kalenga Hamunjela
For many Namibians, saving money often begins and ends with a bank account. While saving is an important first step, it should not be the final goal. The real objective is to grow money over time, and that is where investing becomes important.
One of the most accessible ways for ordinary consumers to begin investing is through unit trusts. These are professionally managed funds where asset managers pool money from many investors and invest it into shares, bonds, property and other financial assets on their behalf.
Namibia has a well-developed investment industry with more than fifty different funds available through institutions such as Old Mutual Namibia, Capricorn Asset Management, Sanlam, Allan Gray Namibia, Ninety One Namibia, Namibia Asset Management and Momentum Metropolitan. Each fund has a different investment strategy and level of risk, but the overall aim is the same: long-term capital growth.
One of the longest-standing unit trusts in Namibia is the Old Mutual Namibia Growth Fund, which delivered a 37.7% return over the past year. The fund was launched in July 1994 and today manages approximately N$843 million in assets. It invests across a diversified portfolio of Namibian and South African companies including Naspers, Gold Fields, FirstRand Namibia, AngloGold Ashanti, Capricorn Group, Capitec Bank and Harmony Gold. Resources make up the largest share of the portfolio at 38.1%, followed by financials at 27.7% and industrials at 27%, giving investors exposure to multiple sectors of the economy.
Perhaps the most important point for consumers is accessibility. With Old Mutual Namibia, investors can open a unit trust with a lump sum of as little as N$300, and monthly contributions can start from just N$100.
This makes investing far more accessible than many people realise and shows that long-term investing does not require large amounts of money to begin.
Another example is the Capricorn Equity Fund, managed by Capricorn Asset Management, which delivered a 57.63% return over the past year. The fund tracks the FTSE/JSE Capped Top 40 Index, giving investors exposure to some of the largest companies listed in Southern Africa. However, this particular fund has a higher entry level, with a minimum opening investment of around N$75,000.
While a 57% return is exceptional, it also reflects the higher risk and volatility associated with equity-only funds, which can experience larger market swings compared to more balanced investment options.
What many investors may not realise is that Namibia offers a relatively favourable tax environment for long-term investing. The country does not have a capital gains tax, which means investors do not pay tax on profits made when selling shares or investment funds. Dividends from many Namibian companies are generally subject to a 10% withholding tax, which is often deducted at source.
This compares favourably with countries such as South Africa, where investors must pay capital gains tax when selling investments at a profit.
This tax structure gives Namibian investors a meaningful advantage in long-term wealth building. Yet many people are still unaware of it and leave their savings in low-interest accounts where money may lose value over time due to inflation.
The key message for consumers is simple, saving money is the beginning of financial discipline, but it should not be the end. Investing allows savings to grow and compound over time. With more than 50 funds available in Namibia, and entry points as low as N$100 per month, the barrier to entry is far lower than many people assume.
For those considering taking the first step, the process is often simpler than expected. A basic starting checklist would include choosing a regulated asset manager, selecting a fund that matches your risk tolerance and investment timeframe, starting with a small monthly contribution that you can maintain consistently, and allowing time for the investment to grow through long-term compounding rather than trying to time the market.
Developing the habit of investing early, even with small contributions, can make a significant difference to long-term financial security.
Disclaimer: The information provided in this article is for educational and informational purposes only. It does not constitute financial, investment, legal, or professional advice. Readers should not rely on this content as the sole basis for making investment decisions and are encouraged to seek independent professional advice before acting on any information contained herein.
*Erastus Kalenga Hamunjela is a Namibian investment researcher and financial markets commentator with a strong focus on capital markets, investment literacy, and data driven financial education.
For Educational Investments, Business Consultation & Collaborations: erastuskalengier@gmail.com
