Unit Trusts

An investment which provides access to financial markets, local and foreign.

You can invest directly in a unit trust.
Or invest in a unit trust via one of the other investment products.

A unit trust is split into equal portions called “units”.
When you invest, you buy units in the unit trust of your choice.
These units belong to you until you sell them.

Your money is pooled with the money of other investors in the unit trust.
Experienced investment managers use the pool of money to buy assets.
Equities, bonds, cash and property, depending on the unit trust’s objective.

The number of units you buy depends on:
1. The amount of money you invest and,
2. The price of the units on the day you buy them.

The price of these units depends on the value of the assets.
Daily priced because the value of the assets changes daily.

Unit trusts make money for you in two ways:
1. Capital growth: when the price of the assets increase
2. Income: the underlying assets may earn interest or dividends.

Benefits include:
Experienced investment managers decide in which assets to invest.
Diversify risk because you invest in a variety of assets.
Transparency regarding fees and assets. 

Safeguards:
A trust holds your money. Not on the balance sheet of the unit trust company.
An independent trustee looks after the assets of the unit trust.
A mandate sets out the unit trust’s objectives and how it intends to invest.
The trustee keeps an eye on the investment manager to stick to the mandate.
The Collective Schemes Act governs unit trusts.

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