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What is a Collective investment Scheme or “Unit Trust”?

Wealth Creation

Collective investments, or commonly known as unit trusts provide a means for ordinary people to invest in the stock exchange alongside institutional investors and to potentially beat inflation by achieving positive returns. Many people do not have a clear understanding of what collective investments are. In a way, they can be described as a group of people investing for a common interest. The world of collective investments is massive, and it can be overwhelming, as there are many types of funds with vast varieties of risk profiles. The purpose of this PocketFin course is to familiarize the concept of Collective Investment Schemes (CIS).

Chapter 1 : What is CIS otherwise known as a unit trust?

A (CIS) unit trust is one of the most commonly used investment vehicles in South Africa and these are provided by many different financial investment providers, in this chapter we dive into what a CIS is.

Chapter 2 : Investment portfolios, units and NAV price

Let’s learn about what a CIS (unit trust) is made up of and some important terms you will come across when investing with this investment vehicle.

Chapter 3 : Why invest in a unit trust?

Why are unit trusts such a popular investment vehicle? Let’s discuss the concept of capital growth when buying units, as well as the component of generating income in the chosen portfolio.

Chapter 4 : Advantages of unit trusts?

We pinpoint all the advantages of using a unit trust, from access to diversification to the accessibility of funds factor when using this investment vehicle.

Chapter 5 : Disadvantages of unit trusts

We pinpoint the disadvantages of using a unit trust, such as investment manager expectations, benchmarks and risks of volatility when using medium to long term unit trusts.

Chapter 6 : Conclusion

Let’s wrap up this course where you have learnt the ins and outs of one of the most popular investments of choice in South Africa!

Course Curated By:

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Waseem Abrahams

Director and content/strategy advisor

Waseem has been in financial services for 13 years in various roles. From consulting and dealing with 300 IFA practices, setting up alternative distribution models, managing the national footprint for one of SA’s largest asset managers and developing B2B strategy with one of SA’s largest leading banks.

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