Unit trusts are good investments

Unit trusts explained

Posted  August 14, 2012

About unit trusts:Unit trusts are an attractive investment option for a number of reasons. They allow you to invest in stock markets without any expert knowledge, give you quick and easy access to your funds and there are no penalties for early withdrawal. But what exactly is a unit trust?

A unit trust is a type of collective investment available in Australia, New Zealand, South Africa and the UK, among other countries. In the United States a similar type of collective investment is called a mutual fund.

Unit trusts are defined as managed, collective investments where the funds of a number of investors are pooled and invested in local and foreign stock exchanges by a management company. This management company employs experienced fund managers to manage and monitor investments on a daily basis.

But what are your funds invested in? When you purchase your unit trusts you will select the type of fund you would like your money invested in. These funds are defined, among other things, by the assets invested in, for example local and/or offshore equities (shares), listed property, cash, bonds or a combination of these.

One of the benefits of a collective investment such as unit trusts is that because your funds are pooled with those of other investors you are able to diversify your investment across a number of companies and assets with a relatively small amount of money. By diversifying your investment you are effectively spreading your risk, in other words if one company or asset does not perform particularly well you do not stand to lose a lot of money as you have invested in a number of companies and assets.

Invest today with 1Lifeinvest:With 1Lifeinvest you can buy unit trusts for as little as R500 per month with a choice of three funds:

  • Sanlam Managed Conservative Fund of Funds (FOF)
  • Sanlam Managed Moderate FOF
  • Sanlam Managed Aggressive FOF

Find out more about 1Life Invest or call us on 0860 10 53 40 to start investing.

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