Navigating through the unit trust clutter

By Werner Gerber, CFA Wealth Manager PSG Wealth Hermanus

In last month’s edition, we provided you with a general overview of collective investment schemes, also known as unit trust funds. In this edition, we focus on mandate-specific funds to help you navigate through the unit trust clutter.

The Association for Savings & Investment SA (ASISA) classifies unit trust funds according to where they invest (locally or offshore), what they invest in (the asset class) and their main investment focus (how much they can invest in a particular asset class). Together, these three tiers form the basis of all mandates.

Unit trust funds are firstly classified into four first-tier groups, based on their underlying offshore investments: South African portfolios; worldwide portfolios; global portfolios and regional portfolios.

• South African portfolios, which invest at least 60% of their assets in South African investment markets, such as the JSE. They may invest up to a maximum of 30% of their assets outside of South Africa, plus an additional 10% of their assets in Africa, excluding South Africa.

Click below to read more.