How much does it cost to invest in Unit Trusts?

How much does it cost to invest in Unit Trusts?
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Unit trusts are considered relatively low cost compared to other types of investment funds.

Unit trusts pool money from multiple investors, allowing them to benefit from economies of scale. This means that the costs of managing the fund are spread across a larger pool of assets, reducing the cost per investor.

Each unit trust may have different fees associated with the fund, because funds are managed and measured differently. There are various reasons for the difference in fees, for example;

  • Whether the fund is active or passively managed;
  • The size of the fund;
  • The frequency of any trading activity (buying and selling within the fund); and
  • Whether the fund charges a fee based on performance. A performance fee is essentially an additional fee that is linked to the performance of the fund. This means lower fees will apply when performance is poor and higher fees when performance is good. This is done to align the interests of the fund manager and the investor.

As per legislation, each unit trust must have its own fund factsheet or minimum disclosure document (MDD) which provides investors with more information about the fund and all the fees associated with it.

The “Fees & Expenses” section provides you with the fees associated with the fund such as management fees, administrative costs, and other charges. Knowing these costs is crucial to figuring out if the fund is cost-effective for you.

Fund factsheets or minimum disclosure documents (MDD) can be found and accessed on the EasyEquities ‘Buy’ page for each unit trust, under ‘Fund Information’, or on our EasyWealth website where you can compare different unit trusts.

In addition to the above variable fees, the following costs apply when investing in unit trusts on the EasyEquities platform:

Annual Unit Trust Platform Fee: 0.25% of net asset value of your unit trust holdings.

An Annual Unit Trust Platform Fee will be charged annually and paid monthly. The Annual Unit Trust Platform Fee relates to the cost of the ongoing administration of your investments in Unit Trusts and is calculated as a percentage of the total annual net asset value of your investments in Unit Trusts.

Broker Commission: There is no broker commission charged on unit trusts.

If you want to get a bit more detail on the kind of costs you might need to consider, a full profile of all costs / fees charged by EasyEquities is available right here.

Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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