What Is The Top-Performing Unit Trust In South Africa?

By Klnam Kurt •  Updated: 11/28/24 •  5 min read

Unit trusts have become a sound investment method for several South Africans trying to improve their fortune. Many diversified investment avenues are also professionally managed and accessible, particularly to the inexperienced and the advanced investor. From this point, this article shall discuss unit trust performance in South Africa by detailing unit trusts’ profitability, top performers, returns, and possible drawbacks while giving guidelines on investment horizons.

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Can You Make Money from Unit Trusts?

Yes, unit trusts are one of the available options for attempting to increase wealth over time. In short, by pooling their money with that of the other investors, unit trusts allow entry to a portfolio that is professionally managed and comprises equities, bonds, and properties.

The returns would be capital growth, interest, or dividends, depending on its focus. Returns depend on the type of unit trust and how the market will behave at any given time. For example, conventionally, equity-based unit trusts would do better in the long term but typically become unpredictable and volatile in the short term.

Alternatively, income-oriented funds carry stability with them, yet returns are moderate. However, most South African funds related to balanced or growth-oriented unit trusts gave annualized returns of over 15% in conducive conditions. These would be aligning investment goals with the right fund and management fees and appropriately holding your investment to handle market fluctuations.

What Is the Top Performing Unit Trust in South Africa?

This depends on the objective of the fund, as well as its strategy for investment. Over time, some funds emerge that stand out in the market based on their returns.

What Are the Returns on Unit Trusts in South Africa?

Returns for unit trusts in South Africa can range from conservative single-digit percentages to more aggressive double-digit annualized gains. This, however, depends on the type of fund. For instance,

What Are the Disadvantages of Unit Trusts?

While unit trusts boast many advantages, everything remains perfect, and there are a few drawbacks that its performance will present. Some significant disadvantages include:

How Long Should You Invest in a Unit Trust?

Depending on the composition of the underlying asset, the ideal investment horizon for unit trusts is:

The longer the period of investment, the higher the probability of reaping better returns, as the fund can fight and recover from market downturns. Again, periodic reassessment is vital to check whether your investment is moving in the right direction to accomplish your financial goals.

Final Thoughts

Unit trusts represent a desirable investment for South Africans, offering a solid case based on access to these pools of diversification through professional management. Whereas some funds, such as Fairtree Select Equity and Investec Dynamic Equity, are already performing unreal, the proper fit for your portfolio must be selected depending on your financial goals and risk appetite. Consider any fund’s performance, fees, and strategy carefully before investing in one while trying to adopt a long-term approach. If approached correctly, unit trusts could make a welcome addition to reaching those goals.

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