Equity unit trusts: An easy way to buy shares
If you want to invest in shares, but you don't want to do the share picking yourself, equity unit trusts could be for you. Not only that, if you want exposure to the stock market, but you don't have a large lump sum, equity unit trusts are an option to consider. Let's take a closer look at what equity unit trusts offer you…
Equity unit trusts
invest the majority of their funds into shares listed on the Johannesburg Stock Exchange (JSE), the team of experts at The South African Investor
These unit trusts must have at least 75% of their available funds in shares (equities) at all times.
What’s the aim of investing in equity unit trusts?
The main goal of these funds is to grow each rand you invest as much as possible.
There are many different types of equity unit trusts available for you to invest in. Let’s take a closer look at some of these…
General equity funds
These unit trusts invest in a selection of shares across the JSE. There is no particular theme or investment style. The main aim of this type of fund is capital growth over the medium- to long-term.
These unit trusts invest in growth companies in any sector on the JSE. Growth companies are those that earnings are on, or analysts expect to enter, a strong and sustainable upward trend. The main aim of this type of fund is capital appreciation.
These unit trusts invest in ‘value’ shares in any sector on the JSE. A value share could be one trading at a discount to its net asset value for instance. The main aim of this type of fund is capital appreciation over the medium- to long-term.
As the name suggests, these are unit trusts that invest in specific sectors of the JSE. For instance, the unit trust may focus on only financial shares, only mining shares or only industrial shares.
There is a wealth of information available on all the different funds available online. All unit trusts have an accompanying fact sheet. The fact sheet tells you:
What the unit trust is focused on;
The unit trust’s performance;
The split of the unit trust’s investments;
If any dividends are paid;
The fees payable; and
The minimum investment amounts.
Make sure you check out the fact sheet of funds you’re interested in.
So there you have it, what equity unit trusts can offer you.