STEPHEN CRANSTON: Unpacking unit trusts
The downside of a unit trust portfolio is that it is tempting to track performance over short periods
I don’t think anyone can argue against putting listed equities at the heart of an investment strategy. Some studies show you can do even better in private equity, collectables or the right real estate deals. This may not be true, though, after the higher fees and commissions from these asset classes. And most shares on the JSE can be sold on the same day. Most of us prefer the convenience of unit trusts as a wrapper, which give a diversified portfolio for as little as R200/month. Perhaps the downside of a unit trust portfolio is that it is tempting to track performance over short periods. The old Association of Collective Investments tried to ban performance reporting of less than a year. But when Morningstar came into SA it resisted this. It provides daily performance figures to its international clients. I once sat in on a Sanlam Investment Management morning meeting in which they looked at the previous day’s performance of the larger competitors. This might seem about as useful a...
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