How to choose a Unit Trust

2021 was an excellent year for our unit trust managers in South Africa. EasyEquities continues to listen to our Investors and add the most popular and wanted unit trusts.

This article discusses the wonderful returns in 2021.

When you jump into your Easy Account and click on INVEST NOW and then move down to the Unit trust tab. You will be presented with a filter that asks for what type of unit trust you are looking for. The range is either Income, Balanced, Property, Local Equities or Global Equities. This is the first decision you going to need to make when choosing a unit trust.

Some guidelines and thoughts around where these options could fit into your portfolio:

Income – For an investor looking to park money for a short period of time. Up to around 3 years.

Balanced – these funds are great for retirement funds or for an investor looking for moderate risk in their portfolio with diversification between all asset classes. (Cash, property, bonds, shares, offshore). Ideal time frame is 3 – 5 years to remain invested.

Property – For an investor looking for exposure to listed properties. Time frame is 5 years plus.

Local Equities – For the long-term investor, 5 years and more. The funds look for growth over the long term by investing in various share locally.

Global Equity – Also for the long-term investor. Goal for the fund manager is also capital growth over the long term.

Essentially your own investment objects are important when selecting which type of unit trust you need to invest in. Same size fits all, is not applicable here.

We would then suggest that you visit our wealth portal to filter the details of each unit trust manager. You can filter according to philosophy, fund size, fund classification, costs and income or dividend distribution.

A unit trust manager is required to have a MDD (Minimum disclosure document) which needs to discuss important info on the fund. There is really useful information on this document. This can be access through the EasyEquities platform.

Have a look at the section on the funds aim or objectives and see if this ties in with your reason for investing.

An example is on this is the Emperor Global Equity Fund, it states there that the “fund is suitable for investors who are looking for outperformance relative to the S&P 500 total return index and want long term capital growth”.

Another example is the Fairtree Flexible Income Fund, it states that “The fund will endeavour to protect capital and maximize income growth”.

Both are very different funds with different objectives. Hope this helps you in making an informed decision.

All the best for your investment journey.

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