Unit Trusts In South Africa

A equity unit trust is the most common type of all the unit trusts in South Africa. The majority of its assets are held in equities or securities of listed companies. There are a wide range of equity unit trusts available in the market ranging from funds with low risk and low return to high risk with high return. There are the general unit trust types.

Types Of Unit Trusts In South Africa

Index Funds

These type of funds invest in a range of companies that closely track companies according to a particular index.

Aggressive funds

Funds generally invested in companies with high capital growth potential but come with high risk.

International equity funds

Funds invested primarily in overseas share markets.

Fixed income funds

The main objective of  fixed income funds is to provide regular income with less emphasis o producing capital growth for investors. These funds invest mainly in Malaysian Government Securities, corporate bonds and money market instruments like bankers acceptance and fixed deposits.

Money market funds

Money market unit trusts operate similar to a bank account, the unit price is normally set at a fixed amount. These unit trusts are low risk money market instruments that are in effect shot term loans to banks and other low risk financial institutions.

Real estate investment trusts

These unit trusts invest in real properties, usually commercial office properties and provide the investor with an opportunity to participate in the property market in a way which is normally impossible to the small time investor.

Exchange traded funds

A exchange traded fund is linked unit trust fund whose investment objective is to achieve the same return as a particular make index. These type of funds can be bought and sold throughout the trading day through a stockbroker on exchange.

Balanced Funds

This type of unit trust generally has a portfolio comprising equities, fixed income securities and cash. This is investing in a all major asset classes to reduce the risk of investing in a single class.

Syariah Funds

The key focus point of this type of unit trust is to provide an alternative avenue for investors to Syariah requirements. These funds exclude those companies involved in activities, services or products related to conventional banking, financial services, insurance, gambling, alcoholic benvrageps and non halal food products.

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