WEALTH WATCH: Unit trust assets pass milestone
This collective investment is a life insurers’ favourite but small, regular savers are overlooked, writes Stephen Cranston
The unit trust industry has breached the R2-trillion asset value level. That may surprise many people who do not realise they are in unit trusts. Almost everything on investment platforms, for example, goes into unit trusts and a big chunk of endowment policies invest into the instruments. It is certainly an industry that has changed since it was invented by Massachusetts Investors Trust in 1924. Then unit trusts (or mutual funds as they are called in the US) were a convenient way for regular savers to invest in the New York Stock Exchange. Equity funds still exist in SA, but they now represent just 20% of assets, almost all in general equity. Investment into specialist equity categories, such as small cap or resources, is negligible. That is not to say they can’t play a useful role in a portfolio, perhaps just that financial advisers are reluctant to take on such a specialised risk. Sadly, unit trust companies put almost no resources into the regular saving market, preferring to fo...
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