Unit Trusts Back to Basics
Just because army days may be a distant memory for many does not mean it's not sometimes necessary to return back to basics.....
By June Engelbrecht BCom (Economics) (Stellenbosch), MBA (University of Preston, US)
between exchange traded funds and unit trusts in more detail in a future issue of BTM, this article provides the basics you need to know about unit trusts. A unit trust is an investment vehicle that is made up of a pool of funds such as stocks, bonds, money market instruments and similar assets. Money managers operate unit trusts by investing the fund's capital and attempting to produce capital gains and income for the fund's investors. With many different investment fund options, it is important to note that the risk and return between various collective investment schemes will differ between the investment objectives such as balanced funds, growth funds, income funds and index funds.
A
Reasonable cost because bulk transactions result in reduced dealing costs
Fund manager's professional expertise
Choice - there are increasing numbers of alternative funds from which to choose.
Beatthemarket.co.za | March 2012
Diversification, thus your risk will be spread over a range of investments
The main benefits of pooled funds are:
unit trust or exchange traded fund is a compulsory investme nt recommended for any person aged between 16 and 55 years. While we shall discuss the differenc e
With the basics covered, here is how the top ten unit trusts have performed over the past five years:
1. 2. 3. 4. 5. 6. 7.
Stanlib Property Income A Inv Solutions property shares A
Stanlib Multi Manager Property Fund Investec Property Equity fund A Catalyst SA Property Equity Fund A
8. Momentum small/midcap A 9.
BlueAlpha All Seasons 96.12%
Prudential Enhanced SA Prop Tracker A 94.02% Cadiz Equity Ladder
88.89% 87.84% 87.02% 86.67% 85.73% 85.42% 84.98%
10. Old Mutual SA Quoted property Fund 82.23%
I end on a cautionary note by pointing out that past performance is not an indication of future performance. If you want to get started on a monthly debit order investment, BTM recommends that you obtain more information and advice from reputable websites such as
www.equinox.co.za or
www.satrix.co.za.
About the author: June Engelbrecht has been a full time business owner for the past six years and has authored ten economics and management science textbooks for Maskew Miller Longman and Macmillan publishers.
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