Many investors will have at least some part of their savings invested in a collective investment scheme (CIS), which allows a group of investors to pool their money and invest in a range of underlying securities managed by an experienced investment manager. The most common CIS in SA is a unit trust. Investors in a CIS share the risks and benefits of investment in the scheme in proportion to their participatory interests. The ownership an investor has in the CIS is shown as units. The value of these units — known as the unit price or net asset value — fluctuates as the value of the underlying securities rise and fall. Units are priced at a set time each business day. The unit price value includes both capital and net income. The capital portion is the value of the underlying investments the fund owns. This may include local and offshore shares, bonds, money market and property. The capital portion increases when there is an increase in the value of the underlying investments (decreas...

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