Why Unit Trusts?

Unit trusts give you the opportunity to pool your money together with other investors who have similar investor objectives. Experienced investment managers then invest this pool of money in different assets in financial markets, such as a wide range of local and international equities, bonds, property and money market instruments.

We highlight some of benefits of investing in unit trusts include:

• They are easy to access and exit– there are no minimum investment periods. You have access to your money within 48 hours. But remember you’ve invested for the long term so try not to touch your savings unless necessary.
• You can invest in a unit trust for as little as R200 a month (monthly debit order) or a R5 000 lump sum.
• You always know how much you own because you receive a certain amount of units depending on how much you have invested. Each unit trust has a cost per unit (or net asset value). So you know how many you have and can check their value in the paper daily.
• Good value. The annual management fees are competitive and clearly stipulated. The initial fees are low and negotiable with your intermediary.
• Your money is safe as it’s held in a trust account – and not by the investment company.
• Tax-effective: Unit trusts are effective in terms of Capital Gains Tax because the tax is paid within the unit trust fund.
• Being part of a pool of investors increases your buying power because fund managers can buy assets you, as an individual investor, couldn’t on your own.
• You’ve heard of not keeping all your eggs in one basket? Unit trusts help you spread your risk by investing in a range of asset classes so that if one asset is not performing well, the performance of the others tends to compensate for this.
• Unit trusts are managed by highly qualified, skilled and experienced investment professionals who make the best decisions on your behalf.
• History is on your side. It’s been proven that the longer you leave your money in most unit trusts, the greater the opportunity for growth.  Work on a time horizon of anything from three to five years but preferably the longer the better.
• If you need advice, speak to a Certified Financial Planner and remember that past performance is not necessarily an indication of future performance.

We’ve simplified the process of investing in a unit trust by creating a tool that allows you to calculate how much you will need to make your dream a reality.

Click here to visit Smart Invest. our online investing platform. It’ll give you a good idea of the basics of what you need to know about investing in unit trusts.