MARKET VALUE

MARKET VALUE

Unit trusts are a sound investment option

There are plenty of investment options available, from stocks to property. One of the most popular options is unit trusts, which are ideal medium- to long-term savings instruments. The MD
of Old Mutual Unit Trusts, Pieter Hugo, gives Man all the need-to-know to help inform your investment decision.

The basics

‘Unit trusts are very simple investment vehicles in which a group of people pool their money and put it all into one pot, which then gets invested in a specific
way. Everyone gets their proverbial slice
of the cake,’ says Pieter. ‘You can invest very easily, either by making monthly investments ad hoc or via a lump sum. It’s also tax and cost efficient.’

Besides being rather flexible, unit trusts are also extremely accessible. You can get your money out of a unit trust in 24 hours – without any penalties – and
in many cases, your investment portfolio can also be accessed online. At Old Mutual, for example, ‘you can see your money online or on your smartphone –
and make transactions.’

Saving, your way

A common myth is that investing in unit trusts can be a costly exercise, but Pieter disagrees. ‘You get access to the money markets at 0.5% per annum, access to South African equities from only 0.6% per annum or even access to some international equities at less than one percent per annum. So you are literally buying the expertise of some of the best fund managers in the world for less than one percent per annum,’ he says. ‘You’ll get both the expertise and the resources of the biggest fund management companies at a very low cost.’

Investing in equity unit trusts is not just an easy, cost-effective option either. You can access your unit trust funds for as little as R500 a month and disinvest at any time.

‘There are no contractual obligations and, while you should aim to invest for longer periods, you can stop and start as your life requires,’ says Pieter.

For the novice, a professional broker is recommended. There are a number of unit trust options on the market and navigating them takes time and skill. So before you decide to go all in, turn to the experts to guide you.

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