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Revealed: The top performing local unit trusts to invest in for your retirement!

by , 30 April 2013

Looking for proof that unit trusts are still popular locally? Here it is: The Association for Savings and Investment South Africa says the local collective investment schemes industry attracted the second highest quarterly net inflows ever for the first quarter of the year, at R47 billion. If you'd like to join the trend, here's what to look for to ensure you invest in a top performing local unit trust.
 
The investment management industry is implementing International Financial Reporting Standards or IFRS across the board locally. 
 
This means that unit trusts will be more effectively run and you’ll see a good return on your unit trust investment, says FSP Invest.
 
This comes as investors have started to pile into local unit trusts, says Moneyweb.
 
And no wonder, with the Association for Savings and Investment South Africa (Asisa) numbers showing that that the local collective investment schemes industry has an offering of 988 funds. 
 
So where do you start, if you’re looking to invest in a local unit trust to boost your retirement savings?
 
It’s a good idea to invest where others invest.
 
Because the bigger the fund, the more money it’ll manage and more resilient it’s likely to be if the market dips, says FSP Invest.
 
Drumroll, please: The top performing unit trust type for the past quarter…
 
The funds that were the most popular were South African multi-asset funds, with inflows of R26.2 billion. 
 
More specifically, investors went for funds with low equity allocations. 
 
This should come as no surprise due to the remarkable volatility across equity and bond markets in recent years, says The South African Investor.
 
And the worst performing unit trust sector in the last year?
 
South African interest-bearing money market funds, says Moneyweb.
 
While the DailyNation says this may be a surprise as equity funds require some degree of risk tolerance as they’re exposed to market risks on account of volatility in share prices, it’s to be expected.
 
The reason?
 
South African investors have recently started to swap interest-bearing investments for funds like unit trusts that make use of equity exposure to achieve inflation-beating returns, says The FinancialMail.
 
One thing to keep in mind if investing in a unit trust…
 
If you’re still not sure where to invest, remember that most flows into unit trusts come through financial advisers who prefer to delegate the asset allocation decision to fund managers. 
 
Thanks to the IFRS, transparency will become a major factor of unit trusts – and regular reports keep fund managers on their toes and minimise the chances of you experiencing any nasty surprises when you invest in a unit trust, says FSP Invest.
 
Keep this in mind if you decide to invest in a unit trust to save for your retirement.
 


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