STEPHEN CRANSTON: Unit trusts not penetrating the mass market
It looks encouraging that in a traumatic year for SA, unit trusts attracted a net R134bn — about R2,500 per citizen. They now hold R2.25 trillion of assets, catching up with assets on a life insurance licence. Unfortunately, few benefited from a boom year in which the shareholder weighted index was up 21%. For a start, the average general equity fund managed only a 12.2% return, and many fund s can only invest up to 10% in any one share, including Naspers. But according to the Association for Savings & Investment SA (Asisa), even a mediocre equity fund would have been a substantially better investment than a money market fund, with 7.8%, or a short-term interest-bearing fund (let’s keep it simple and call it an income fund), with 8.7%. These income funds were all the rage in the year, attracting R41bn. Much of this was at the expense of the lowequity funds — the gorillas and mammoths such as Coronation Balanced Defensive, Allan Gray Stable and Nedgroup Investments Stable funds. Over...
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