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Why I love Unit trusts


Why I love Unit trusts

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I am by nature more of a conservative investor and being a Chartered Accountant emphasises my reluctance for taking huge risks. I had to teach myself to become an aggressive investor and to take on more risk. During my investment journey I quickly learned that financial knowledge is powerful. The more knowledge you have the better you can mitigate your risk and maximize your returns. Over the years unit trusts became my favourite investment and I earned good money from them.

Related: Unit Trusts explained

 I found unit trusts to be less complicated since there is a dedicated and specialised fund manager who makes the decisions with regards to the underlying asset allocations. Each fund is managed through a mandate, which lessen your risk of the fund manager making extreme investment decisions which can harm your portfolio.

There are a variety of unit trusts available which make diversifying your portfolio, in terms of types of unit trusts and exposure to different underlying asset classes, possible. Unit trusts give you exposure to equities, properties and offshore investments that might be difficult to invest in directly. There are unit trusts with low, moderate and high risk profiles offering you low, medium to high returns; and therefore cater for both conservative and aggressive investors. Unit trusts are also more cost effective since there is a pool of investors carrying the fund expenses.

Don’t panic when your unit price is falling, give it time to recover. However keep a watchful eye on your investment all the time. There are minimum investment requirements, but you can build up the funds in a notice deposit or fixed deposit until you have adequate funds to invest in unit trusts.

Learning to understand and interpret unit trust fund fact sheets makes investing in unit trusts easy. The fund fact sheets contain all the information you need to analyse each fund and its performance over different periods. Do proper research to find a fund that suits your profile and needs. You don’t have to stick to your bank when you want to invest in unit trusts; explore what the other institutions can offer you and which institutions’ funds are performing the best. It is easy to start investing in unit trusts via the institutions’ online platforms. Equip yourself with adequate knowledge to make empowered decisions and you can save a lot on broker fees.

Written by Ronel Jooste

CA(SA), Financial Consultant and Coach, Blogger and Speaker

Contact Ronel:

For more information about my financial wellness programmes visit the website

Article reposted with permission from Financially fit life. Original post here.

Related: What happens to your unit trust investment when you die?

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Ronel Jooste is a CA(SA), Financial Consultant, Speaker and Author of the award-winning book Financially Fit and Wealthy. Ronel is a multiple award-winning serial entrepreneur and a director at FinanciallyFit Group (Pty) Ltd specializing in financial consulting, training and employee financial wellness programmes.

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