A Unit trust is a type of investment that makes it easy and affordable for the “man on the street” to invest in the financial markets.
Your funds are pooled together with other investors’ money to invest in underlying asset classes by an investment company.
These assets classes include: Equity, Property, Bonds and Cash. These assets classes can be South African or off-shore.
Investment period
Unit Trusts don’t have a restriction period like insurance products, but in order to see good return on your investment, it is best to invest long-term (anything between 5-10years or more)
Minimum amounts
You can invest as little as R500 per month with most asset managers (think Stanlib, Coronation, Allan Gray, Investec etc.) ….so no excuse why you are not investing!
Risk
While there is always risk involved when accessing financial markets, you can mitigate this by choosing funds that are not as risky BUT remember; the higher the risk, the higher the expected return.
Return
Unlike a bank account where the interest rate is fixed, the return on Unit Trusts fluctuate with how well the fund is performing, that’s why it is best to invest long-term. Over the long-term, you want to invest in an inflation beating investment…Unit Trusts are a good start.
Access to funds
Once invested, it is very easy to access your funds (normally with less than 7 days) but always remember your investment goal and not withdraw your funds on a whim!
Why a Unit Trust?
Investing in unit trusts can meet your needs for a deposit on a home, an education for your child or any capital expenditure…and if you are like me, just watch your money grow …cause #girlsjustwannahaveFunds right J
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