Warwick Eastern Cape Regional Manager, Rudi Oosthuizen shares his insights regarding the merits and benefits of personal share portfolios and unit trusts. “An investment in knowledge pays the best interest.” — Benjamin Franklin As if choosing an appropriate investment strategy and correct asset allocation is not daunting enough, an investor needs to also select between having a Personal Share Portfolio (PSP) or a Unit Trust investment. Media campaigns have ensured that most current and prospective investors can name several asset managers, but very few can distinguish between a PSP and a Unit Trust investment. Let’s have a closer look. A Unit Trust investment is a fund that pools together several investors’ money. The investor does not directly buy a share trading on the stock market, but rather buys a unit of the pooled investment. The investment manager then uses the monies from the investors that bought units to buy shares on the stock market. Each unit of the pooled investment has a price called a unit price expressed in Rand terms. By dividing the investment value by the unit price, each investor can calculate how many units he owns in the pooled investment. Unit prices are calculated on a daily or […]
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