How to Choose the Right Fund Objective 🗺️

Welcome to another exciting chapter in your investment adventure! In our previous blog post, we compared reading a fund sheet to navigating a map with a friend, ensuring you both knew where you were headed before embarking on your journey. Today, we're shining a spotlight on the heartbeat of any unit trust – the Fund Objective.

Think of the Fund Objective as the back cover blurb of the investment book you're about to dive into. It offers a glimpse into the adventure ahead, helping you understand where your money is headed and what adventure lies ahead.

Why Does it Matter?
Just like our favourite novels, each fund has its unique story to tell. The Fund Objective tells you what the fund aims to achieve with your hard-earned money. 

Is it on a quest for long-term growth, or does it seek to provide stable income? Perhaps it's a blend of both, promising an exciting and rewarding journey.

The Fund Objective paints a picture of the fund's goals and aspirations, giving you a glimpse of the opportunities and potential risks it holds. So, before you decide to embark on this financial adventure, make sure you're well-acquainted with the Fund Objective.


Case Study: "The Example Index Fund."
The Example Index Fund is Regulation 28 compliant and offers diversified exposure to all the key local and international asset classes. The Fund tracks a composite index benchmark, with a long term strategic asset allocation, rebalanced on a bi-annual basis in March and September.

Let's look at "The Example Index Fund." It's a versatile fund that complies with regulations and gives you a mix of different local and international investments. 

What's interesting is that instead of following just one index, it tracks a combination of them, like having a diverse cast of characters. This can help spread risk and boost potential rewards.

Plus, this fund has a long-term plan in place for your investment journey, with periodic adjustments made every March and September. It's like having a well-structured map that's updated to keep you on track.

So, with "The Example Index Fund," you're not just investing; you're setting off on a carefully planned adventure that adapts to the changing financial landscape. Each fund is like a unique chapter in your financial story.

Unveiling Common Fund Objectives
Let's lift the curtain on some of the typical fund objectives:

  • Growth: These funds aim to grow your investment over the long term. If you're in it for the marathon, seeking capital appreciation, this might be your pick.
  • Income: Income-focused funds are all about regular payouts. They're like your dividend checks – great for investors seeking a steady income stream. 

  • Balanced: A balanced fund is a mix of growth and income. It's like having the best of both worlds, catering to both short-term and long-term objectives. 

  • Aggressive: Buckle up for an adventurous ride! Aggressive funds aim for rapid growth but come with higher risks. Perfect for the daredevils of investing.

  • Conservative: If you're more of a "slow and steady wins the race" kind of person, conservative funds prioritise capital preservation and minimal risk.

Finding Your Match
To make the most of your investment journey, your Fund Objective should align with your personal goals, risk tolerance, and time horizon. Think of it as choosing the right path for your adventure. Before you dive into a fund, take a good look at its objective to make sure it's in sync with your financial destination.

In our next chapter, we'll delve into the exciting world of benchmarking.

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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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