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Five things you need to remember when picking the best unit trust to invest in

by , 18 March 2014

So you've decided to invest in unit trusts. That's great. But with the thousands available out there, how do you buy good unit trust? That decision ultimately rests on you, but remembering these five things can help you narrow down your choices…

Successful unit trust investing starts by remembering these five crucial factors

Unit trust investing tip #1: Assess where you are and where you want to be
To plan ahead, you need to know what your current situation is. By doing this, you’ll know how much money you need and how much money you have to get you there. Once you know this, you can find the best unit trust to invest in to achieve these goals.

Unit trust investing tip #2: Make sure you understand what you’re investing in
“Although unit trusts are considered to be less risky than stocks, you can still lose quite a bit if you pick the wrong unit trust. Make sure you know things like: What is a Balanced Fund? What is a feeder fund? Risks of single-country, single industry funds vs. Global Funds and so on,” advises shareinvestor.com.

Unit trust investing tip #3: Be prepared to stick with it
Unit trusts are a long-term investment. Keep this in mind to ensure you don’t incur unnecessary costs from switching funds too often.

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Unit trust investing tip #4: Take advantage of rand cost averaging
Like you do with your retirement fund, ask your unit trust provider if it accepts monthly debits. If it does, set one up so you can invest into it on a monthly basis. This way you’ll not only invest more money, but you’ll get more bang for your buck than investing a lump sum once a year when the market is riding high.

Unit trust investing tip #5: Understand the costs
Once you’ve picked the funds you believe are the best unit trusts to invest in, evaluate the cost/fee structure. Shareinvestor.com advises you “go for the one with the lowest costs. Unit trusts that charge less will earn more for you over time. Make your money work for you, not the other way round. Why pay more?”

There you have it. Five things you need to consider when you decide on which is the best unit trust for you to invest in.



Five things you need to remember when picking the best unit trust to invest in
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